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Suppose that a shift has caused aggregate demand to cross the aggregate supply curve to the right of the intermediate range. Which of the following statements is true?


Unemployment is above natural rate.


Price level will decrease as a result of the shift.


Short-run output will increase and so will short- and long-run price level as a result of the shift.


Overtime will reduce as a result of the shift.


The Fed might consider reducing interest rates because of this event.

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