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self-correcting

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self-correcting
Answered Same Day Dec 23, 2021

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Robert answered on Dec 23 2021
131 Votes
Q4
a.
The above diagram shows a recessionary gap since AS > AD at the full employment level. This implies that equili
ium GDP < GDP with full employment, so that some resources are unutilized.
With prices and wages flexible, the unemployed workers will be willing to work at lower wages. They are employed leading to shift of...
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