Use the figure below to answer the following questions.

Figure 28.1.2
-Refer to Figure 28.1.2.If the short-run aggregate supply curve does not shift,and remains at SAS0,then the expected inflation rate is

Question

Use the figure below to answer the following questions.
  
Figure 28.1.2
-Refer to Figure 28.1.2.If the short-run aggregate supply curve does not shift,and remains at SAS0,then the expected inflation rate is

Quizplus · Accepted Answer

Since the short-run aggregate supply curve does not shift, the expected inflation rate will remain at the current equilibrium point, which is where the aggregate demand curve intersects the SAS0 curve. From the graph, we can see that this equilibrium point corresponds to a zero percent expected inflation rate. Therefore, the answer is A) zero.

Use the Figure Below to Answer the Following Questions