Assume the countries of Ornania and Kumbagi are major trading partners. Ornania is currently in long-run macroeconomic equilibrium. As a result of a recession in its economy, Kumbagi decreases its demand for goods produced in Ornania. What will occur in Ornania in the short run?

Since Ornania and Kumbagi are trading partners and Kumbagi later reduced its demand for the goods produced in Ornania, this will lead to the aggregate demand curve shifting to the left in Ornania and can lead to a recessionary gap.

The aggregate demand curve will shift to the left because there is a reduction in demand. Contractionary fiscal policy is also another reason for a shift in the aggregate demand curve to the left.

Sam1s Sam1s · Answer 2 · 2022-03-10T13:43:41+01:00

The Ornania in the short run is :

-The aggregate demand curve will move to the left, coming about in a recessionary gap.

"Macroeconomic Equilibrium"

The Ornania in the short run is that the aggregate demand curve will move to the left, coming about in a recessionary gap.

The Ornania and Kumbagi are exchanging accomplices and Kumbagi afterward decreased its request for the merchandise created in Ornania.

This will lead to the total request bend moving to the cleared out in Ornania and can lead to a recessionary gap.

The total request bend will move to the cleared out since there's a decrease in demand.

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