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Starting from Long-Run Equilibrium,use the Basic Aggregate Demand and Aggregate

question 215

Essay

Starting from long-run equilibrium,use the basic aggregate demand and aggregate supply diagram to show what happens in both the long run and the short run when there is a decline in wealth.


Definitions:

Absolute Threshold

The lowest level of stimulation that an organism can detect at least 50% of the time.

Attention

The process of sorting through sensations and selecting some of them for further processing.

Difference Threshold

The smallest difference in stimulus intensity required to detect a difference between two stimuli, also known as the just noticeable difference (JND).

Cornea

The tough, transparent, protective layer that covers the front of the eye and bends light rays inward through the pupil.

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