section+21 - ECON 101B Section 21 Handout Date Question 1...

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ECON 101B: Section 21 Handout Date: 04/15/2011 Question 1 Answer the following questions about the short-run aggregate supply equation: Y = Y + ( P EP ) 1. Let = 0 : 5 . Draw the aggregate supply curve. What is its slope? 2. As the term increases, how does this change the supply curve? 3. If the expected price level increases, how does this change the supply curve? Question 2 In the sticky-price model, describe the aggregate supply curve in the following special cases. How do these cases compare to the short-run aggregate supply curve we discussed in Chapter 9? s = 1 ). 2. The desired price does not depend on aggregate output ( a = 0 ). Question 3 Question 4
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section+21 - ECON 101B Section 21 Handout Date Question 1...

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