The AD/AS model is static. It shows a snapshot of the economy at a given point in time
Chapter 24, Problem 53(choose chapter or problem)
The AD/AS model is static. It shows a snapshot of the economy at a given point in time. Both economic growth and inflation are dynamic phenomena. Suppose economic growth is 3% per year and aggregate demand is growing at the same rate. What does the AD/AS model say the inflation rate should be?
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