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Question 1

The graph below shows the AD-AS diagram for the US.

Suppose that the economy is initially in long-run equilibrium with the price level of `700` (Red AD and SRAS curves).

Now suppose that dollar depreciates.

As a result of this event what is the new short-run price level?

 

As a result of this event, what is the new short-run GDP?

 

As a result of this event, what is the new long-run price level?

 

As a result of this event, what is the new long-run GDP?

 




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