Assuming that the economy is initially in equilibrium at, Business Economics

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Assuming that the economy is initially in equilibrium at

Assuming that the economy is initially in equilibrium at potential GDP. Use an AD-AS graph to show the effect of an increase in government purchases on the price level and the output level in the short run and in the long run. Explain what is happening in your graph.

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Business Economics: Assuming that the economy is initially in equilibrium at

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