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Show the short run effects of a decrease in the demand for goods and services caused...

Show the short run effects of a decrease in the demand for goods and services caused by a pandemic. Suppose the economy is an open economy that is on a flexible exchange rate. To answer this question, draw the following five diagrams: 1. The goods market, [3 marks] 2. The money market, [3 marks] 3. The IS-LM curves, [3 marks] 4. The interest parity condition, and [3 marks] 5. The AS-AD curves. [3 marks]

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Ans3- GOODS MARKET:- In this case, when the demand for goods and services caused by a pandemic decreases then the demand of G- IS-LM curve: Rate of Interest Y1 National Income In this case, the IS and LM Curves Combined. The integration of commodityAD and AS INCOME AND OUTPUT IN THIS CASE, the aggregate demand decreases to AD 1 which shows the overall decrease in the inco

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