Beginning at long-run equilibrium in the dynamic model of aggregate demand and aggregate supply, if the central bank permanently reduces its inflation target, then in the first period after the policy change, the dynamic aggregate supply (DAS) curve and the dynamic aggregate demand (DAD) curve shifts upward; shifts rightward O b. does not shift; shifts leftward O c. does not shift; does not shift O d. shifts downward; shifts leftward a.

Beginning at long-run equilibrium in the dynamic model of aggregate demand and aggregate supply, if the central bank permanently reduces its inflation target, then in the first period after the policy change, the dynamic aggregate supply (DAS) curve and the dynamic aggregate demand (DAD) curve shifts upward; shifts rightward O b. does not shift; shifts leftward O c. does not shift; does not shift O d. shifts downward; shifts leftward a.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter23: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 3CQQ

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