Question
Assume the economy is in an initial general equilibrium (1). Then there is an increase in...
Assume the economy is in an initial general equilibrium (1). Then there is an increase in government spending. Show the movement to a new temporary equilibrium (2). Then after the economy adjusts, we move to a final general equilibrium (3). You must show all three points ( 1,2,3) in all five diagrams —Y=f(N), Nd/Ns, I/S, Ld/Ms/P and IS/LM--- making sure they line up and tell a consistent story. Label all axes.
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