Use the simple Keynesian model to answer this question. a. Draw a graph representing an economy that is in short-run equilibrium where the economy is in a recession. In your graph make sure you represent Ye and Yfe. Describe in words what would happen if this economy tried to produce at Yfe.Answer: If this economy tries to produce at Yfe, aggregate expenditure will be less than aggregateproduction. This implies that unplanned inventories will increase and that producers willrespond…
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