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The Winter of 2015 Saw Ridiculous Levels of Snowfall in the Maritimes

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Essay

The winter of 2015 saw ridiculous levels of snowfall in the Maritimes and parts of eastern Canada.As a result, there were unexpected closures of business and government offices.Suppose that this caused an increase in the price level and a decline in real GDP in 2015.Also assume that potential real GDP continued to grow due to other factors.You can assume the aggregate demand curve did not change. Show the macroeconomic equilibrium for 2014 and 2015 using the dynamic aggregate supply and aggregate demand model.


Definitions:

Lockbox

An address, usually a commercial bank, at which a company receives payments in order to speed collections from customers.

Cash Collection

The process of receiving and managing payments from customers or clients, typically in the form of money.

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