Determine the impact of the each of following types of shocks on output and inflation in the short-run and long-run. (Use AS-AD-LRAS curves to illustrate your reasoning). A decline in consumer confidence. An increase in inflation expectations. An increase in export demand.

Determine the impact of the each of following types of shocks on output and inflation in the short-run and long-run. (Use AS-AD-LRAS curves to illustrate your reasoning). A decline in consumer confidence. An increase in inflation expectations. An increase in export demand.

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter7: Inflation

Section: Chapter Questions

Problem 13SQ

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Question

Determine the impact of the each of following types of shocks on output and inflation in the short-run and long-run. (Use AS-AD-LRAS curves to illustrate your reasoning).

A decline in consumer confidence.
An increase in inflation expectations.
An increase in export demand.

Defintion Defintion Curve that represents the graphical relationship between the total supply of goods and services and the price level in the economy. When the price level increases, producers tend to supply more of a product in the market to earn a higher revenue or vice versa.

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