History, 29.09.2019 19:30 jordanrose98
The ad/as model is useful in predicting the effects of various shocks and policy changes on an easconomy. the model is based on goods and services being exchanged in well-functioning markets. in general, however, markets are not always perfect. consider how the model would change as a result of market imperfections. (hint: can the as/lras shift when there are governmental controls? ) how would the ad/as model change if input prices, such as wages and raw material prices, were set by the government rather than in markets? if the government sets input prices, what long-run effect?
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The ad/as model is useful in predicting the effects of various shocks and policy changes on an easco...
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