Question: An economys relationship between short - run equilib - rium output and inflation ( its aggregate demand curve ) is described by the equationY =

An economys relationship between short-run equilib- rium output and inflation (its aggregate demand curve) is described by the equationY =13,00020,000.Initially, the inflation rate is 4 percent, or =0.04. Potential output Y* equals 12,000.(LO2)a. Find the output in short-run equilibrium.b. Find the inflation rate in long-run equilibrium.Show your work.

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