Economic Fluctuations
Explain economic fluctuations and how shifts in either aggregate demand or aggregate supply can cause booms and recessions using the model of aggregate demand and aggregate supply. Show graphs and example.
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Monetary neutrality is assumed to exist in the long run rather than in the short run implying that fluctuations in the supply of money do not affect the short-term effects. Economic fluctuations can be explained by the model of aggregate supply and demand whereby the model explains economic fluctuations in the short run around the long run trends…
(445 Words)