Following the economic boom in Australia in 2004, the Reserve Bank and the government adopted a tight fiscal, tight monetary monetary policy mix. According to our AS-AD framework, this event would translate to a leftward shift of the AD curve. What would subsequently happen to output and inflation?

Macroeconomics: Private and Public Choice (MindTap Course List)
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Chapter14: Modern Macroeconomics And Monetary Policy
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Following the economic boom in Australia in 2004, the Reserve Bank and the government adopted a tight fiscal, tight monetary monetary policy mix.

According to our AS-AD framework, this event would translate to a leftward shift of the AD curve. What would subsequently happen to output and inflation?

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