A positive supply shock creates a 5% GDP gap. What is the new inflation rate? Inflation Rate 4.25% 3.75% 3.25% 2.75% 2.25% 1.75% 1.25% 0.75% 0.25% 60 70 80 90 00 LRAS C SRAS AD 100 110 120 130 140 150 Output Index
A positive supply shock creates a 5% GDP gap. What is the new inflation rate? Inflation Rate 4.25% 3.75% 3.25% 2.75% 2.25% 1.75% 1.25% 0.75% 0.25% 60 70 80 90 00 LRAS C SRAS AD 100 110 120 130 140 150 Output Index
Chapter13: Inflation
Section: Chapter Questions
Problem 7SQP
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![A positive supply shock creates a 5% GDP gap. What is the new inflation rate?
Inflation Rate
4.25%
3.75%
3.25%
2.75%
2.25%
1.75%
1.25%
0.75%
0.25%
60
70 80 90
00
LRAS
C
SRAS
AD
100 110 120 130 140 150
Output Index](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4e64f3dd-984a-4000-a380-17c818d574a7%2Fc47f10d4-5162-430e-b42f-920574a8f32b%2Funt5hvn_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A positive supply shock creates a 5% GDP gap. What is the new inflation rate?
Inflation Rate
4.25%
3.75%
3.25%
2.75%
2.25%
1.75%
1.25%
0.75%
0.25%
60
70 80 90
00
LRAS
C
SRAS
AD
100 110 120 130 140 150
Output Index
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