Suppose that real-time estimates of the GDF gap are always accurate, and that the Fed always takes actions to ensure that GDP is equal to potential GDP. Which of the following will occur, if the Fed learns that the GDP gap is equal to - 3%? ORwill fall. The inflation rate vil fall Y will fall. There will be an unintended increase in business invennories

Suppose that real-time estimates of the GDF gap are always accurate, and that the Fed always takes actions to ensure that GDP is equal to potential GDP. Which of the following will occur, if the Fed learns that the GDP gap is equal to - 3%? ORwill fall. The inflation rate vil fall Y will fall. There will be an unintended increase in business invennories

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter24: The Aggregate Demand/aggregate Supply Model

Section: Chapter Questions

Problem 3SCQ: The short run aggregate supply curve was constructed assuming that as the price of outputs...

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The short run aggregate supply curve was constructed assuming that as the price of outputs increases, the puce of inputs stays the same. How would an increase in the prices of important inputs, like energy, affect aggregate supply?
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