Short run and long run aggregate demand

Reference no: EM1314392

a) Assume an initial macroeconomic equilibrium. Explain both the SR and LR impact of an expansionary AD shock. Use appropriate diagrams and provide a brief real world example of this type of shock.

b) Create another diagram; once again start from an initial macroeconomic equilibrium. Explain both the SR and LR impact of a contractionary AS shock on Y. Use the appropriate diagrams and provide a brief real world example of this type of shock.

Reference no: EM1314392

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