Business, 04.12.2019 04:31 gamerdoesart
Consider the economy of freeland, whose overall actual price index and actual output are p and y respectively, and the natural rate of output is ห y . there are two types of firms in freeland: firms with flexible prices, which set prices according to p = p + 0.5(y โ ห y ); and firms with sticky prices, which set prices base on p = pe (the expected overall price index). also the fraction of firms with sticky prices is s = 0.75.
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