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Macroeconomics
4th Edition
ISBN: 9780393602487
Author: Jones, Charles I.
Publisher: W. W. Norton & Company
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Question
Chapter 12, Problem 2RQ
To determine
Sticky inflation assumption and the short-run model.
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Students have asked these similar questions
Describe how changes in expected inflation
impact an economy in the wake of a temporary
negative supply shock.
Consider a standard AD-AS model.
If the central bank responds relatively aggressively to inflation being below target, temporary
supply shocks have relatively little effect on output.
True/False. Remember to include your explanation.
Answer the following using relevant models and / or graphs:
(1) Explain the factors that affect inflation in the short and medium term.
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Similar questions
- Which of the following is a policy tool used to combat demand-pull inflation? a) Contractionary fiscal policy b) Expansionary monetary policyarrow_forwardWhen aggregate output is below the natural rate of output, what happens to the inflation rate over time if theaggregate demand curve remains unchanged? Why?arrow_forwardWhat is the difference between cost-push inflation and demand-pull inflation? Explain the demand-pull inflationary process.arrow_forward
- Determine the impact of an increase in inflation expectations on output and inflation in the short-run and long-run. (Use AS-AD-LRAS curves to illustrate your reasoning).arrow_forwardCost-push inflation is depicted as a rightward shift of the aggregate demand curve along an upsloping aggregate supply curve. True or False?arrow_forwardConsidering the efforts put forward by the Fed during the last recessionary crisis and prior, are there still any tools available to the Fed to utilize as we move from deflation into an inflationary period?arrow_forward
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