Show with graphs what happens to the ae and phillips curves

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Reference no: EM131221597

Suppose the economy starts with output at potential. Then a supply shock occurs: oil prices rise sharply. The Fed is partly accommodative: it raises the real interest rate, but not by enough to keep inflation from rising.

Show with graphs what happens to the AE and Phillips curves, and to output and inflation.

Reference no: EM131221597

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