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Question By using clearly labeled AD

Question By using clearly labeled AD

Question
By using clearly labeled AD and AS curves to illustrate your points, discuss the impacts of the following events on the equilibrium price level and equilibrium level of output in the short run.

c) A strong hurricane destroys energy plants which causes energy prices to increase, assuming that the Fed attempts to keep interest rates constant by accommodating inflation.

(d) A contractionary fiscal policy supported by a cooperative Fed acting to keep output from falling.

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