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6Chp22-Econ3310 - Aggregate Supply Equilibrium Analysis...

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Unformatted text preview: Aggregate Supply Equilibrium Analysis lowers investment and net exports (I ↓, E ↑→ NX ↓) raises the interest rate i ↑ increases demand for money M d ↑ (LM curve to the left) The aggregate demand is downward sloping because a higher price level (P ↑): Y AD = C + I + G + NX Behavior of Aggregate Demands Component Parts Aggregate Demand ...
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