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Americans are becoming more cautious with their household

Assume that US macroeconomic equilibrium is equal to potential GDP. Americans are becoming more cautious with their household spending due to the uncertainty of the presidency of Donald Trump. Using the AD-AS model, explain carefully the immediate and long term effects of this scenario towards the economy. Draw by hand the appropriate AD-AS diagram to support your explanation.

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Business Management: Americans are becoming more cautious with their household

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