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Unformatted text preview: Use the natural policy as the economy's long-run solution. (c) What happens to the budget deficit from the short-run to the long-run? (d) Where is investment higher: initially or in the long-run? QUESTION 3 Economy is currently in a recessionary gap. If the natural long-run solution is used, explain what happens to investment, net exports, and (public) debt. ECON105 week 8 questions Eldar Sehic SFU 2010-1...
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- Spring '10