What policies can be used to offset the impact of the supply shock, and why?

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Use the AS-AD model to investigate the impact of an adverse supply shock

Use the AS-AD model to investigate the impact of an adverse supply shock

Question
Use the AS-AD model to investigate the impact of an adverse supply shock on the economy in the short run and in long run. What policies can be used to offset the impact of the supply shock, and why?

Use the AS-AD model to investigate the impact of an adverse supply shock

 

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