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The AS-AD model with inflation
When we remove assumption of constant prices to allow varying real wages. Resulting model was known as AS-AD model. Similarly we now remove the assumption that Π = Πw (but Π may only deviate from Πw temporarily and they should be equal on the average).
Firms such a Moody's and Standard & Poor's study corporations that issue bonds. They publish "ratings" for the bonds- evaluation of the likelihood of default. Suppose these rating
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