A) Identify - and justify with macroeconomic arguments the long-term adjustments (i.e., the possible displacements of the 3 curves identified on the graph) that can be expected, all things being equal. b) Identify - and justify with macroeconomic arguments what are the implications for:i. the inflation rate,ii. the real growth rate,iii.the unemployment rate, andiv. the output gap (i.e. the difference between realized GDP andfull capacity GDP) 31. Economic AnalysisA few years ago, in a public address, the Deputy Governor of the Bank of Canadaexplained that, according to the analyzes of the Central Bank:<< (...) the Canadian economy is operating above its productive capacityand domestic demand remains strong, despite the tightening of creditconditions following the recent turbulence in financial markets.However, we pay particular attention to the relatively low levelof inflation in the country and the volatility of the dollar on theexchange markets (...)"Within the framework of the OA-DA model that we have studied, this situation canbe illustrated by the graph below:P.OALTYp YoOACT,DAY (real GDP)

Macroeconomics is the study of the economy's overall functioning. Because it is concerned with how…

Answered: A) Identify - and justify with…

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter33: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 7PA

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A) Identify - and justify with macroeconomic arguments the long-term adjustments (i.e., the possible displacements of the 3 curves identified on the graph) that can be expected, all things being equal.

b) Identify - and justify with macroeconomic arguments what are the implications for:

i. the inflation rate,

ii. the real growth rate,

iii.the unemployment rate, and

iv. the output gap (i.e. the difference between realized GDP and

full capacity GDP)

31. Economic Analysis
A few years ago, in a public address, the Deputy Governor of the Bank of Canada
explained that, according to the analyzes of the Central Bank:
<< (...) the Canadian economy is operating above its productive capacity
and domestic demand remains strong, despite the tightening of credit
conditions following the recent turbulence in financial markets.
However, we pay particular attention to the relatively low level
of inflation in the country and the volatility of the dollar on the
exchange markets (...)"
Within the framework of the OA-DA model that we have studied, this situation can
be illustrated by the graph below:
P.
OALT
Yp Yo
OACT,
DA
Y (real GDP)

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