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Unformatted text preview: (1) LEAVE SUPPLY CURVE AS IS (2) SHIFT DEMAND CURVE DOWN BY T (3) WHERE (NEW) DEMAND, SUPPLY INTERSECT, HAVE P S AND Q (4) TO FIND P D , ADD T TO P S MOVE UP TO OLD DEMAND CURVE Q S = Q D 3P S 9 = 36 2P D 3P S 9 = 36 2[P S + T] 5P S = 45  2T = 43 IF T = 1 P S = 43/5 = 8.60 P D = P S + T = 8.60 + 1 = 9.60 Q S = 3P S 9 = 25.8 9 = 16.8 Q D = 36 2P D = 36 19.2 = 16.8...
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This note was uploaded on 01/21/2011 for the course ECON 252 taught by Professor Robertholand during the Spring '08 term at Purdue UniversityWest Lafayette.
 Spring '08
 RobertHoland
 Macroeconomics

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