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How and why the shock enters the as-ad model

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Question: Currency crises and the demand for dollars: Suppose there is a currency crisis in the rest of the world, leading to an increase in demand for U.S. dollars (a "flight to safety"). Use the AS/AD framework to explain the effects of this shock on the U.S. economy. Be sure to explain carefully how and why the shock enters the AS/AD model.

Reference no: EM131634763

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