Part 1: The Medium Run AS-AD Model A. The US economy was sent into a recession...

 

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Part 1: The Medium Run AS-AD Model A. The US economy was sent into a recession by the external shock of the Covid pandemic. Using the AS-AD model, show and explain the impact and how the economy is supposed to recover and move back to potential output (Yn) in the medium run (20). B. While NeoClassicals and NeoKeynesians agree on the usage of the AS-AD model, they disagree over the "speed of adjustment." Explain their differences (15). C. In the real world, the adjustment process explained in Part A never happens, or is never allowed to happen. Explain why (15). Part 1: The Medium Run AS-AD Model A. The US economy was sent into a recession by the external shock of the Covid pandemic. Using the AS-AD model, show and explain the impact and how the economy is supposed to recover and move back to potential output (Yn) in the medium run (20). B. While NeoClassicals and NeoKeynesians agree on the usage of the AS-AD model, they disagree over the "speed of adjustment." Explain their differences (15). C. In the real world, the adjustment process explained in Part A never happens, or is never allowed to happen. Explain why (15).

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A Starting with medium run equalibrium an economy forces a permenent decline in the oil pricesThe go... View the full answer