As-ad model with inflation, Macroeconomics

Assignment Help:

Q. AS-AD model with inflation?

When we have inflation, both AD curve and AS curve will be gliding. 'The glide rate' of the AD curve is given by ΠMwhereas it is ΠWthat applies to AS curve (where both rates are exogenous). Using AS-AD curves, we can figure out the equilibrium price P (and thus p) at any point in time and we can conclude all endogenous variables. For illustration, we realize that if ΠM = Πw, both curves glide at exactly the same rate. Y would then be unchanged and p will be equal to Πw

Figure: Determination of Y and P in the AS-AD model with inflation

2062_AS-AD model with inflation.png


Related Discussions:- As-ad model with inflation

National income, working of static and dynamic multiplier in consumption fu...

working of static and dynamic multiplier in consumption function

Uncontrollable environmental variables, Consider an international firm you ...

Consider an international firm you are familiar with and what the firm needs to be concerned with when entering a foreign market. Specifically, in terms of the chapters you covered

Change in demand for the product, The price will change in the market, only...

The price will change in the market, only due to the change in demand for the product. True or false

Gross domestic product, In 1 to 2 sentences respond to the following commen...

In 1 to 2 sentences respond to the following comment. "Pollution restrictions will reduce gross domestic product and therefore hurt the economy."

Benefits of private actions, Public policies often alter the costs and bene...

Public policies often alter the costs and benefits of private actions. Why is it important for policymakers to consider both the direct and indirect effects of public policies? Sel

Macroeconomic problems, Question 1: The common characteristics of LDC...

Question 1: The common characteristics of LDCs include low GDP per capita, capital scarcity, high unemployment, chronic budget deficit, high levels of external debt, hig

Rent control agency of new york city, The rent control agency of New York C...

The rent control agency of New York City has found that market demand is QD=100-5P With quantity measured in tens of though sands of apartments and price, the monthly rental rate,

State the marginal productivity theory, Q. State the Marginal Productivity ...

Q. State the Marginal Productivity Theory. What are its features and assumption? Marginal Productivity Theory of distribution states that in a capitalist economy the demand for

State about the interest rates, State about the Other interest rates Th...

State about the Other interest rates There are many other interest rates in a society. For example, you will earn interest when you deposit money in a bank account and you will

Exchange rates, can a country have a current account deficit and a capital ...

can a country have a current account deficit and a capital account deficit at the same time?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd