Macroeconomics 6th Edition by Robert Hall,Marc Lieberman

تمرين 3

Suppose that, initially, the price level is P 1 and GDP is Y 1 , with no built-in inflation. The Fed reacts to a negative demand shock by neutralizing it. The next time the Fed receives data on GDP and the price level, it finds that the price level is above P 1 and GDP is above Y 1. Give a possible explanation for this finding.