28Chp22-Econ3310

28Chp22-Econ3310 - Aggregate Supply Equilibrium Analysis 4....

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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 ...
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