Use the keynesian ad-as model to answer the following


Use the Keynesian AD-AS model to answer the following questions.

Draw the effects of a recession caused by a decease in aggregate demand. For simplicity, assume that your economy starts at general equilibrium. 

Assume you are chairman of the Fed. What are your two options? When would each policy be the optimal option?

Draw the effects of both of these options (graph) and explain in words

 

 

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Microeconomics: Use the keynesian ad-as model to answer the following
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