Assume that Country X is in the long term equilibrium at the end of 2015. The i...
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Assume that Country X is in the long term equilibrium at the end of 2015.
The initial long term equilibrium is represented by AD1 and AS
In 2016, Country X is experiencing a decline in the exogenous component of consumption.
Assuming that no other change or policy takes place, which point or points on the diagram below could be the new long term equilibrium in Country X?
Find the most correct answer.
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