Inflation rate and growth rate of real and nominal gdp

Reference no: EM1313838

Suppose that natural real GDP is constant. For every 1 percent increase in the rate of inflation above its expected level, firms are willing to increase real GDP by 2 percent. The output ratio is initially 100 and the inflation rate equals 2 percent.

Draw the new short-run Phillips Curve.

Reference no: EM1313838

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