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Experiencing inflation in the long run

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Reference no: EM131502467

1. Use the dynamic model of aggregate demand and aggregate supply to illustrate and explain a situation where the economy is growing but experiencing inflation in the long run.

2. Draw a dynamic aggregate demand and aggregate supply graph to illustrate and explain how it is possible to have real GDP falling below potential GDP between two time periods at the same time as the price level is rising.

Reference no: EM131502467

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