ROM a position of potential GDP and zero inflation, suppose there is a sudden and permanent decline

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ROM a position of potential GDP and zero inflation, suppose there is a sudden and permanent decline in potential GDP. Describe the behaviour of prices, output, interest rates, consumption, investment, and net exports.

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Macroeconomics

ISBN: 978-1464168505

5th Canadian Edition

Authors: N. Gregory Mankiw, William M. Scarth

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Question Posted: Aug 26, 2013 06:49 AM

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ROM a position of potential GDP and zero inflation, suppose there is a sudden and permanent decline

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The sudden decline in potential output causes the long run AS shift to left This causes ...View the full answer

Macroeconomics

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