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Explain the short-run macroeconomic implications

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Reference no: EM131831387

Using the Keynesian 45-degree diagram, explain the short-run macroeconomic implications of the increase in investment spending in Australia and how it impacted on the unemployment rate. Be sure to address the following in your answer:

(i) Starting from an initial equilibrium point what is the effect of investment on output and unemployment

(ii) Provide a detailed explanation of the transition process involved in moving from an initial equilibrium to a new equilibrium

Reference no: EM131831387

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