Question: In Example 11.1, we found that a decline in consumer spending tends to reduce the rate of inflation. Using the AD-AS diagram, illustrate the shortrun

In Example 11.1, we found that a decline in consumer spending tends to reduce the rate of inflation. Using the AD-AS diagram, illustrate the shortrun and long-run effects of a fall in consumer spending on inflation. How does the decline in spending affect output in the short run and in the long run?

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