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Category > Economics Posted 17 May 2017 My Price 6.00

The economy of Brazil

The economy of Brazil is in long-run equilibrium with full employment. In the short run, nominal wages are fixed. a) Draw a correctly labeled graph of long-run aggregate supply, short-run aggregate supply, and aggregate demand. Show each of the following.  i) Equilibrium output, labeled Y1 ii) Equilibrium price level, labeled PL1 b) Assume the Brazilian government has decreased spending by 50%. On your graph in part (a), show the effect of this reduction in government spending. Label the new equilibrium output and price level Y2 and PL2, respectively. C) Based on your answer in part (b), what is the impact of the reduction in government spending on people who have a fixed income?qa_attachment_1494441207312.jpg

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SuperTutor
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Status NEW Posted 17 May 2017 04:05 AM My Price 6.00

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file 1494995040-Solutions file.docx preview (56 words )
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