Suppose that the aggregate demand (ADI)curve in an economy is Y = 10,000 - 10,000
,current inflation ( )equals 0.03 (3%),and potential output (Y*)equals 9,700.If,starting from long-run equilibrium,an inflation shock raises inflation to 7%,in the short run,output will equal ________ and,in the long run,output will equal _________
A) 9,300;9,300
B) 9,300;9,500
C) 9,300;9,700
D) 9,700;9,700
E) 9,700;9,300

Question

Suppose that the aggregate demand (ADI)curve in an economy is Y = 10,000 - 10,000 
,current inflation ( )equals 0.03 (3%),and potential output (Y*)equals 9,700.If,starting from long-run equilibrium,an inflation shock raises inflation to 7%,in the short run,output will equal ________ and,in the long run,output will equal _________
A) 9,300;9,300 
B) 9,300;9,500 
C) 9,300;9,700 
D) 9,700;9,700 
E) 9,700;9,300

Quizplus · Accepted Answer

The Answer of Suppose that the aggregate demand (ADI)curve in an economy is Y = 10,000 - 10,000 
,current inflation ( )equals 0.03 (3%),and potential output (Y*)equals 9,700.If,starting from long-run equilibrium,an inflation shock raises inflation to 7%,in the short run,output will equal ________ and,in the long run,output will equal _________
A) 9,300;9,300 
B) 9,300;9,500 
C) 9,300;9,700 
D) 9,700;9,700 
E) 9,700;9,300

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