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Use the Dynamic Aggregate Demand and Aggregate Supply Model and Start

question 168

Essay

Use the dynamic aggregate demand and aggregate supply model and start with Year 1 in long-run macroeconomic equilibrium.For Year 2,graph aggregate demand,long-run aggregate supply,and short-run aggregate supply such that the condition of the economy will induce the Federal Reserve to conduct a contractionary monetary policy.Briefly explain the condition of the economy and what the Federal Reserve is attempting to do.


Definitions:

Vibrio Cholerae

A bacterium that causes cholera, a severe diarrheal illness, through contaminated water or food.

Helicobacter Pylori

A type of bacteria that infects the stomach lining and can cause ulcers and sometimes lead to stomach cancer.

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Organisms that obtain their energy through the chemical oxidation of inorganic substances and use that energy to synthesize organic compounds from carbon dioxide.

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