Unformatted text preview: Aggregate Supply Equilibrium Analysis 4. Stabilizing role for monetary policy depends on output
deviations from the natural rate of output (output gap). 3. The Fed’s ability to stimulate the economy depends on the
degree price stickiness. 2. Monetary policy aﬀects only price level in the long run 1. Monetary policy aﬀects output only in the short run and has
no eﬀect on output in the long run Conclusions from AD/AS for monetary policy Aggregate Demand ...
View Full Document