b. Discuss how the economy adjusts from the short run to the medium run. What would you recommend the government should do as it adjusts to the medium run? Why?

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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b. Discuss how the economy adjusts from the short run to the medium run. What would
you recommend the government should do as it adjusts to the medium run? Why?
Transcribed Image Text:b. Discuss how the economy adjusts from the short run to the medium run. What would you recommend the government should do as it adjusts to the medium run? Why?
Suppose at the current equilibrium the economy is experiencing a constant inflation rate. The
government wants to increase expenditures to avoid possible economic recession arising from
an economic crisis. Using the IS-LM-PC framework,
Transcribed Image Text:Suppose at the current equilibrium the economy is experiencing a constant inflation rate. The government wants to increase expenditures to avoid possible economic recession arising from an economic crisis. Using the IS-LM-PC framework,
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