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(Solved by Expert Tutors) The figure above shows the aggregate demand and aggregate supply functio


rigid in the short run, but adjust to market conditions in the long run. Currently P = 100 and Y = 1000. Now answer the following questions. The answer to each question should be no more than a short paragraph.a. As in 1990-91, consumer confidence plummets and the aggregate demand function shifts to the left by 400 units. What will happen to P and Y in the very short run (please give me the numbers)? What will happen to P and Y in the long run (please give me the numbers)? Describe the process of self-correcting mechanism from the beginning to the end.b. What are the advantages and disadvantages of using monetary policy in a recession?c. What are the advantages and disadvantages of using fiscal policy in a recession?d. OPEC comes and the price of oil increases. As a result, the general price level increases by 20 units. What will happen to P and Y in the very short run (please give me the numbers)? What will happen to P and Y in the long run (please give me the numbers)? Describe the process of self-correcting mechanism from the beginning to the end.

 


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Apr 19, 2020

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