# Question: Assume the short run aggregate supply curve can be expressed algebraically

Assume the short-run aggregate supply curve can be expressed algebraically as

Y = 4,800 + 3,000π

and the dynamic aggregate demand curve can be written as

Y = 5,000 – 1,000π.

Find the numerical value for equilibrium output in the short run? Find the numerical value for the short-run inflation rate?

Y = 4,800 + 3,000π

and the dynamic aggregate demand curve can be written as

Y = 5,000 – 1,000π.

Find the numerical value for equilibrium output in the short run? Find the numerical value for the short-run inflation rate?

## Relevant Questions

Suppose the real interest rate unexpectedly falls in the absence of other economic changes. What would you expect to happen to (a) Consumption,(b) Investment, and (c) Net exports? Explain how each of the following affects the short-run aggregate supply curve. (LO2)a. Firms and workers reduce their expectations of future inflation.b. There is a rise in current inflation.c. There is a fall in oil prices.Is investment sensitive to the real interest rate? Plot since 1990 a measure of the real interest rate based on the difference between Moody’s Baa corporate rate (FRED code: BAA) and a survey of expected inflation (FRED ...*According to real business cycle theory, can monetary policy affect equilibrium output in either the short run or the long run? *Consider a previously closed economy that opens up to international trade. Use the aggregate demand-aggregate supply framework to illustrate a situation where this would lead to lower inflation in the long run.Post your question