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  3. 4 suppose that the mexican economy is described in the...

Question: 4 suppose that the mexican economy is described in the...

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4.     Suppose that the Mexican economy is described in the following graph:LRAS SRAS AD

a.     Economy is currently at point A; develop an appropriate fiscal policy to restore the natural rate of output. Outline the effect of government’s policy on AD and AS curve. (6 points).

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