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Business, 10.12.2019 02:31 ronaldhernandez598
Consider the following extendedclassical economy (in which the misperceptions theory holds): ady=300+10(m/p). srasy=y+p−pe. okun's law(y-y )/y=−2(u-u). full-employment outputy=500. natural unemployment rateu=0.06. a. suppose that the money supply m = 1000 and that the expected price level pe =50. what are the short-run equilibrium values of output, y, the price level, p, and the unemployment rate, u? what are the long-run equilibrium values of these three variables? b. now suppose that an unanticipated increase raises the nominal money supply to m = 1260. what are the new short-run equilibrium values of output, y, the pricelevel, p, and the unemployment rate, u? what are the new long-run equilibrium values of these three variables? in general, are your results consistent with an expectations-augmented phillips curve?
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Consider the following extendedclassical economy (in which the misperceptions theory holds): ady=300...
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