Question: Suppose the ongoing pandemic affects household consumption by reducing both autonomous consumption c0 and marginal propensity consume c1. a) Analyze the effects of this in

Suppose the ongoing pandemic affects household consumption by reducing both autonomous consumption c0 and marginal propensity consume c1.

a) Analyze the effects of this in the 45-degree diagram (trade mark equilibrium in the IS-LM model)

b) Show instead what is happening in the AS-AD model.

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