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Business, 29.11.2019 05:31 gary4570

An economy’s relationship between short-run equilibrium output and inflation (its aggregate demand curve) is described by the equation: y = 13,000 – 20,000π. initially, the inflation rate is 4 percent, or π = 0.04. potential output y* equals 12,000.

a. the short-run equilibrium output .
b. the rate of inflation at the long-run equilibrium is

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