Answer the following questions based on the scenarios of long macroeconomic equilibrium and consequent stock market boom.

Answer the following questions based on the scenarios of long macroeconomic equilibrium and consequent stock market boom.

Answer the following questions based on the scenarios of long macroeconomic equilibrium and consequent stock market boom.

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Answer the following questions based on the scenarios of long macroeconomic equilibrium and consequent stock market boom.
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a) Which curve will shift? Is it AS curve or AD curve? In which direction does the shift occur?

b) In the short-run, what will happen to the price level and output (real GDP)?

c) What will happen to the expected price level? What impact does this have on wage bargaining power of workers?

d) In the long-run, which curve will shift due to the change in price expectations created by the stock market boom? In which direct will it shift?

e) How does the new long-run macroeconomic equilibrium differ from the original equilibrium?

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