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Unformatted text preview: would respond to this situation. 5. Draw a graph and use it to explain why the reactions of producers to the conditions E < Y and E > Y will cause output to adjust until E = Y. 6. Use a graph to show that if economic actors decide to increase spending the equilibrium level of output increases. Repeat for a decrease in spending. 7. Why does this model imply that measures of future spending (such as new orders for durable goods and building permits) will be leading economic indicators?...
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This note was uploaded on 09/14/2009 for the course EC 400 taught by Professor Cover during the Spring '09 term at Alabama.
- Spring '09