1. Draw the AD-AS model in long-run equilibrium. Using this
graph, depict what happens in the...
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Economics
1. Draw the AD-AS model in long-run equilibrium. Using thisgraph, depict what happens in the short run and in the long run ifhousing prices fall across the country.
2. Draw the AD-AS model when the economy is initiallyencountering an inflationary gap and then the government usescontractionary fiscal policy to return to long-run equilibrium.
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When houisng prices crash the fall leads to domino effects andcauses widespread unemployment into real estate sector and manycompanies go bust as well as banks go bankrupt This causesliquidity freeze
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