Question: 1. [18 points] India has been experiencing accelerating real GDP growth with falling inflation. (1.a1) Is this combination the result of a dominant Aggregate Demand

1. [18 points] India has been experiencing accelerating real GDP growth with falling inflation. (1.a1) Is this combination the result of a dominant Aggregate Demand (AD) or Aggregate Supply (AS) shock? Assume first this is the only shock and use the AD/AS model to predict the effects on output, employment, wages, and prices. Does it matter if the shock is permanent or transitory

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