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Assume you are considering the economy of EU in short run macroecono.pdf

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Assume you are considering the economy of EU in short run macroeconomic equilibrium and the intersection of AA-DD curves is at the potential output. Describe how an increase in import tariffs to goods imported from the rest of the world will affect output and the nominal exchange rate in the short run and in the long run. (Use the AA-DD curves and remember to label your axes correctly.).

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Assume you are considering the economy of EU in short run macroeconomic equilibrium and the intersection of AA-DD curves is at the potential output. Describe how an increase in import tariffs to goods imported from the rest of the world will affect output and the nominal exchange rate in the short run and in the long run. (Use the AA-DD curves and remember to label your axes correctly.)

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