Question: Need explanation how we got 11.5 AD - AS Shocks Inflation Rate LRAS (percent) AS AS G AD, AD, Aggregate Output, Y ($ trillions) On

Need explanation how we got 11.5 AD - AS Shocks Inflation

Need explanation how we got 11.5

AD - AS Shocks Inflation Rate LRAS (percent) AS AS G AD, AD, Aggregate Output, Y ($ trillions) On the graph above, suppose point G is on the short - run aggregate supply curve it = 2.5 + 2 * (Y - 22) and aggregate demand curve Y = 29.25 - 0.5x. If output at point G is 25, and inflation expectations are adaptive, then the inflation rate next period will be O A. 8.5 AB. 11.5 O C. 2.5 O D. 14.5 O E. none of the above

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