Booms and recessions (IV): dynamic aggregate supply and demand - The DAD-SAS model
5 important questions on Booms and recessions (IV): dynamic aggregate supply and demand - The DAD-SAS model
What equality holds in long run equilibrium in the DAD-SAS model? (inflation)
What does EAS stand for?
What are transitory shocks? (DAD-SAS)
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In what three steps does one draw a SAS curve?
2. Go horizontal until Y* is reached
3. Draw positive sloped line through the point reached
In what three steps does one draw a DAD curve?
2. Flexible: move up until EAD at money growth rate
Fixed: move up until EAD at world inflation rate
3. Draw negative sloped line through obtained point
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