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Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364

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BuyFindarrow_forward

Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364
Textbook Problem

Do neoclassical economists see a value in tolerating a little more inflation if it brings additional economic output? Explain your answer.

To determine

Opinion of Neo classical view for importance on additional output over increase in inflation.

Explanation

Neo classical economists believe in long-run equilibrium when AD curve intersects LRAS curve. Economy is self-adjusting. They mainly focus on increase in output level over inflation rate.

They believe in tolerating high inflation over output. This is because inflation will reduce in long-run but increase in output will lead to economic growth...

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