The Australian government imposes a new mandate on all companies requiring them re-fit their operations with a government approved device that monitors each company’s electricity use and automatically reports if it exceeds the new monthly kilowatt usage set by the government regulator. Firms must pay for the new mandatory device and all other associated compliance costs. Use a dynamic AD-AS model that incorporates LRAS and SRAS to show just the initial ceteris paribus effects of this mandate on the macroeconomy. Explain the intuition behind your answer.
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The Australian government imposes a new mandate on all companies requiring them re-fit their operations with...