How might governments attempt to influence long-run
1. Using appropriate AD-AS diagrams explain how
(a) a deflationary gap
(b) an inflation-ary gap may occur.
2. How might governments attempt to influence long-run aggregate supply and there-fore potential GDP?
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1 using appropriate ad-as diagrams explain howa a deflationary gapb an inflation-ary gap may occur2 how might
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1 why might increases in aggregate demand simply lead to a higher price level rather than a higher real gdp2 discuss
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