Of the five endogenous variables in the dynamic model of aggregate demand and aggregate supply, which are the nominal variables that will change in long-run equilibrium if the central bank changes its inflation target?
A) Yt, rt, and it
B) Yt, it, and Etπt + 1
C) πt, it, and Etπt + 1
D) rt, πt, and it
Correct Answer:
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