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Unformatted text preview: because it remains constant at the level of potential output and the LRAS curve. IN the figure below, the change from AD1 to AD2 moved the whole economy to point D (from point A), while the real GDP remained unchanged. This shows how useful this base-year technique is as it acts as a regulator for economists, keeping studying aggregate demand and supply of a country relative to recent history and relevant to inflation (whether negative or positive)....
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- Fall '11