What place upward or downward pressure on the prices, Microeconomics

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What place upward or downward pressure on the prices

Suppose that an economy has the aggregate demand curve:
Y = 500 + 1.25G + 0.625 M / P
and the price adjustment schedule
π = πe + [Y-1 - 1, 250]
1,250

Government spending is $200 and the money supply $800.

a) If Po = 0.8, what would Yo be? Will this place upward or downward pressure on the prices?

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Microeconomics: What place upward or downward pressure on the prices

Reference No:- TGS054248

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Recent Questions Asked Microeconomics

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Request for Solution File

Ask an Expert for Answer!!

Microeconomics: What place upward or downward pressure on the prices

Reference No:- TGS054248

Recent Questions Asked Microeconomics

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Q : What the trend percentage for 2011 is

Q : Describing role of non us financial intermediaries

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