Consider a hypothetical country in which, initially, real GDP equals potential GDP. Suppose that consumer confidence decreases. All else equal (with regard to the AD-IA model), rel- ative to the short-run level, in the long run, inflation is

Consider a hypothetical country in which, initially, real GDP equals potential GDP. Suppose that consumer confidence decreases. All else equal (with regard to the AD-IA model), rel- ative to the short-run level, in the long run, inflation is

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter11: Fiscal Policy: The Keynesian View And Historical Development Of Macroeconomics

Section: Chapter Questions

Problem 6CQ

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Consider a hypothetical country in which, initially, real GDP equals potential GDP. Suppose
that consumer confidence decreases. All else equal (with regard to the AD-IA model), rel-
ative to the short-run level, in the long run, inflation is

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