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Draw a correctly labeled aggregate demand

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Question 1: Draw a correctly labeled aggregate demand and aggregate supply graph showing an economy in long-run macroeconomic equilibrium. On your graph, show the effect of an increase in the money supply, according to the classical model of the price level.

Question 2: Draw a correctly labeled graph of aggregate demand and aggregate supply showing an economy in long- run macroeconomic equilibrium. On your graph, show what happens in the short run if the central bank increases the money supply to pay off a government deficit. Explain. On your graph, show what will happen in the long run. Explain.

Reference no: EM132421737

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