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Q. Aggregate supply in AS-AD model?
In order to figure out all the variables in AS-AD model, we need one more equilibrium condition so that we can identify a unique point on AD curve as the unique equilibrium. This condition will come from production side and labor market.
Assume that Jimmy Cash has $2100 in his checking account and uses his checking card to withdraw $210 from his ATM machine. By what amount did M1 change from this individual transac
C=Ca+.95(Y-T) Ca=400-20r T=1200 + .4Y (M/P)^d = .35Y - 5r (M^s/P)=2000 Ip=1500-20r G=2200 NX=500-.06Y a. Compute the multiplier b. Derive the equation for Ap c. Derive the equatio
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The AD curve is the aggregate demand The AD curve is the aggregate demand as a function of P whenthe goods and money market are both in equilibrium
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