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Contrast the short-run and long-run as curves

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Reference no: EM131576676

1. Compare and contrast the short-run and long-run AS curves for both the Classical and Keynesian models. Include in your explanation WHY the AS curves look different in the two different theories.

2. Suppose a war causes a sudden, large increase in government spending.

(a) What happens to both prices and GDP in the short-run Classical Model? Do they increase decrease or stay the same? Explain.

(b) What happens to both prices and GDP in the short-run Keynesian model? Do they increase decrease or stay the same? Explain

Reference no: EM131576676

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