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A beneficial supply shock

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Consider the attached aggregate model. Which of the following could cause equilibrium to move from point a to point b?

1. A temporary reduction in aggregate supply

2. An adverse supply shock

3. A beneficial supply shock

4. A gradual decrease in resources

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A beneficial supply shock is integrated in this solution.

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3. A beneficial supply shock.

When the economy moves from point A to point B real GDP goes up and the ...

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