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Equilibrium of the dad-das model

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Reference no: EM13126849

Suppose that at time t-1 inflation is zero and there were no shocks in the economy. At time t there is a positive supply shock that lasts for only two periods. Using a graph to illustrate your answer, explain the effect of such a shock on the equilibrium of the DAD-DAS model.

Reference no: EM13126849

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