The equilibrium inflation rate in the economy is determined by the intersection of the aggregate demand and long-run aggregate supply curve at potential output.
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Q101: The Phillips curve suggests that a positive
Q102: Flatter the short-run aggregate supply curve, flatter
Q103: Changes in expected inflation can explain why
Q104: The Taylor rule only takes inflation into
Q105: A temporary supply shock changes potential output.
Q107: High real interest rates can cause further
Q108: The central bank is not interested in
Q109: Economy's potential output is affected by pure
Q110: When monetary policy is altered to help
Q111: Economy's potential output is unaffected by pure
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