Suppose That the Aggregate Demand (ADI)curve in an Economy Is

Multiple Choice

Suppose that the aggregate demand (ADI) curve in an economy is Y = 20,000 - 20,000
,current inflation ( 11ec9ae2_bd79_1ce7_a39a_a9c7bc0c6307_TB34225555_11 ) equals 0.06 (6%) ,and potential output (Y*) equals 19,200.If,starting from long-run equilibrium,an inflation shock raises inflation to 8%,in the short run,output will equal ________ and,in the long run,output will equal _________

A) 18,400;18,400
B) 18,400;19,200
C) 19,200;18,400
D) 19,200;19,200
E) 19,600;19,200