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Starting from Long-Run Equilibrium,if the Public Anticipates That Policymakers Will

question 34

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Starting from long-run equilibrium,if the public anticipates that policymakers will increase aggregate demand by less than policymakers do increase aggregate demand,and if the short-run aggregate supply curve fully adjusts to the (incorrectly) anticipated increase in aggregate demand,then Real GDP will __________ and the price level will __________.


Definitions:

Poverty

A state of economic deprivation, lacking sufficient income to meet basic needs such as food, shelter, and clothing.

Hypersomnolence Disorder

A sleep-wake disorder characterized by an extreme need for extra sleep and feelings of excessive sleepiness.

Concentrating

The act of focusing one's attention or mental effort on a specific task or activity.

Forgetful

Characterized by the inability to remember things or to retain information.

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