Making as-ad diagram, Explain why would you expect

Making as-ad diagram

Assignment Help Macroeconomics

Reference no: EM1373738

[1] Explain why would you expect inflation rate to accelerate if actual unemployment rate declined to a level lower than the "full employment" unemployment rate & remained at that low level for a year or longer? Describe your answer.

[2] Draw an AS/AD diagram illustrating your answer to part (A) That is, draw an AS/AD diagram which shows what happens as an economy operates for a sustained time at a level of actual unemployment that is lower than the unemployment level at potential RGDP. Be sure to label all lines and axes in your diagram clearly.

Reference no: EM1373738

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