Solved

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

Question 36

Multiple Choice

Suppose that the aggregate demand (ADI) curve in an economy is Y = 20,000 - 20,000 Suppose that the aggregate demand (ADI) curve in an economy is Y = 20,000 - 20,000 ,current inflation ( ) equals 0.06 (6%) ,and potential output (Y*) equals 18,800.If,starting from long-run equilibrium,an aggregate supply shock reduces potential output to 18,400,in the short run,there will be a(n) ___________ gap and,in the long run,inflation will equal _________. A) expansionary;6% B) expansionary;7% C) expansionary;8% D) recessionary;6% E) recessionary;8%
,current inflation ( 11ec9ae2_bd79_1ce7_a39a_a9c7bc0c6307_TB34225555_11 ) equals 0.06 (6%) ,and potential output (Y*) equals 18,800.If,starting from long-run equilibrium,an aggregate supply shock reduces potential output to 18,400,in the short run,there will be a(n) ___________ gap and,in the long run,inflation will equal _________.


A) expansionary;6%
B) expansionary;7%
C) expansionary;8%
D) recessionary;6%
E) recessionary;8%

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q31: It seems likely that if the inflation

Q32: Suppose that the aggregate demand (ADI)curve in

Q33: The output losses from an upward inflation

Q34: If the aggregate demand (ADI)curve in an

Q35: If the Bank of Canada's monetary policy

Q37: When actual output exceeds potential output,there is

Q38: High expected inflation leads to _ increases

Q39: At long-run equilibrium,inflation _ and actual output

Q40: Because there is no single,widely-accepted calculation of

Q41: Starting from a long-run equilibrium,immediate or eventual