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Suppose That the Short-Run Aggregate Supply Curve Is: π= 2

Question 40

Multiple Choice

Suppose that the short-run aggregate supply curve is: π= 2 + 1.5 (Y-10) ,where π is inflation and Y is output;and the aggregate demand curve is Y= 11 - 0.5π. The equilibrium output is ________ and the equilibrium inflation rate is ________%.


A) 10;2
B) 17.5;2
C) 2;10
D) 10;7.5

Correct Answer:

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