Suppose the Economy Is Initially at Potential GDP $A$
(B) Suppose Guverment Purchases Increase

question 155

Essay

Suppose the economy is initially at potential GDP.
(A) Draw an agregate demand curve and price adjustrient line, and label the intial equilibriun with an $A$ .
(B) Suppose guverment purchases increase. Illustrate the short-run effect an your diagram. Label the new equilibrium writh a $A$ .
(C) Eigalain the short-run effect an $C , I , Q , X , R$ , and infletion as campared to baseline.
(D) Illustrate the long-run effect on your diagram and label the long-run equilibriun writh $C$
(E) Eoglain the long-run effect an $C , I , G , X , R$ and inflation as campared to baseline.

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Definitions:

Infectious Disease

Diseases caused by pathogenic microorganisms, such as bacteria, viruses, parasites, or fungi that can be spread, directly or indirectly, from one person to another.

Health Center

A facility offering primary and sometimes secondary health care services, often focused on the community or specific patient groups.

Cytokines

Small proteins released by cells, especially those in the immune system, that have an effect on the interactions and communications between cells.

Immune System Cells

Components of the immune system, such as white blood cells, that work to protect the body from infectious diseases and foreign invaders.