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What type of short run equilibrium

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Suppose that the economy is experiencing high inflation and reduced purchasing power with high demand.

(a) What type of short run equilibrium is the economy in? Draw a diagram.

(b) What is the goal of policy makers in this case? Please explain.

(c) Explain how government and the Bank could use Fiscal Policy and Monetary to achieve their goal in part (b). Please include diagrams in your answer.

Reference no: EM133124033

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