LRAS Intaton BRAS SRAS AD AD Output Starting from long-run equilibrium at point C, an adverse inflation shock that increases inflation from n to n' will lead to a short-run equilibrium at point, equilibrium at point, and eventually to a long-run ,if left to self-correcting tendencies.

Economics:
10th Edition
ISBN:9781285859460
Author:BOYES, William
Publisher:BOYES, William
Chapter15: Macroeconomic Viewpoints: New Keynesian, Monetarist, And New Classical
Section: Chapter Questions
Problem 17E
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Refer to the accompanying figure.
LRAS
Intatona
BRAS
SRAS
AD
AD
Output
Starting from long-run equilibrium at point C, an adverse inflation shock that increases inflation
from n to n' will lead to a short-run equilibrium at point
and eventually to a long-run
equilibrium at point
,if left to self-correcting tendencies.
Transcribed Image Text:Refer to the accompanying figure. LRAS Intatona BRAS SRAS AD AD Output Starting from long-run equilibrium at point C, an adverse inflation shock that increases inflation from n to n' will lead to a short-run equilibrium at point and eventually to a long-run equilibrium at point ,if left to self-correcting tendencies.
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