In the short-run model, the steady state is characterized by:
A) $\tilde { Y } _ { t } = 0$
B) $\pi _ { t } = \pi$
C) $\pi _ { t } = \pi _ { t - 1 }$
D) All of these answers are correct.
E) None of these answers are correct.

Question

Quizplus · Accepted Answer

In the short-run model, the steady state is characterized by output being at its natural level ($\tilde { Y } _ { t } = 0$), inflation being at its target level ($\pi _ { t } = \pi$), and inflation being stable ($\pi _ { t } = \pi _ { t - 1 }$).

In the Short-Run Model, the Steady State Is Characterized By Y~t=0\tilde { Y } _ { t } = 0Y~t​=0

In the Short-Run Model, the Steady State Is Characterized By $\tilde { Y } _ { t } = 0$