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Short-run estimates range between 01 and 03, consistent with the general belief that the aggregate response to price changes is small in the short-run, as aggregate production can increase only if more resources are devoted to agriculture or if technical change is adopted

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A rise in the aggregate price level decreases the purchasing power of consumers' assets, so consumers decrease their consumption; a fall in the aggregate price level increases the purchasing power of consumers' assets, so consumers increase their consumption

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