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Macroeconomics 12th Edition by Rudiger Dornbusch ,Stanley Fischer,Richard Startz
Edition 12ISBN: 978-1259070969Macroeconomics 12th Edition by Rudiger Dornbusch ,Stanley Fischer,Richard Startz
Edition 12ISBN: 978-1259070969 Exercise 5
Use equations (3) and (4) to forecast both the price level and the level of output that result from the simple AS - AD model of Section 24-2. You may assume that the slope of the aggregate supply curve is
that the values of the money supply, velocity, and potential GDP are 9, 8, and 7, respectively; and that the expected price level is 5. b. Evaluate your forecast in light of the Lucas critique.
c. How does this forecast differ from that which would result from a perfect-foresight model
d. Is this forecast better or worse Explain
that the values of the money supply, velocity, and potential GDP are 9, 8, and 7, respectively; and that the expected price level is 5. b. Evaluate your forecast in light of the Lucas critique. c. How does this forecast differ from that which would result from a perfect-foresight model
d. Is this forecast better or worse Explain
Explanation
Verified
Verified
Assume that,
Calculate the equilibrium...
Macroeconomics 12th Edition by Rudiger Dornbusch ,Stanley Fischer,Richard Startz
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