Q- in the response to announce
Q- in the response to announced British departure from the EU,Consumption fell in Britain and the uncertainty concerning Brexithas cause firms for postpone investments
a. Use the AS/AD model, analyse the short run implications ofthese developments for real GDP
b. Economist argued that Brexit will permanently lower thepotential output in the UK. Assuming this is the case, indicate onthe AS/AD model the long run equilibrium of the economy
c. The governor of Bank of England has vowed to increase themoney supply in Britain in response to Brexit. Explain in words theimplications of this in both short run and long run.
Answer:
this fall of consumption will create a shortage of demand inEuropian unions which will cause a fall in aggregate demand of theeconomy. this fall in demand will lead to unemployment and createsa recessionary gap in the economy.
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