Question: = * ( * ) + (d) = ^e + ( * ) + (s) Suppose the parameter values are = 0.5,=2, =0.5, =2, *=0.02,

= * ( * ) + (d) = ^e + ( * ) + (s) Suppose the parameter values are = 0.5,=2, =0.5, =2, *=0.02, Y*=1 Suppose the economy begins in an initial long run equilibrium. There is a temporary demand shock (d)=0.05 . In the short run, immediately following this shock, output (Y) and inflation () are

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