Question
I need to write the essay about AD-AS curve with specific example(choosing one of the countries), but I realized that the data that I collected
I need to write the essay about AD-AS curve with specific example(choosing one of the countries), but I realized that the data that I collected contradict with the content that I learned in Macroeconomic course. As you can see below, inflation rate in 2012 is higher than the one in 2014 even though output gap in 2012 is below than that of 2014. I thought price level should be lower in 2012 due to the lower output gap( since real GDP is below than potential GDP). Can someone please clarify why this happening?
Output gap
2014 : -0.661
2013 : -1.698
2012 : -2.297
Inflation rate
2012 Q1
3.1
2012 Q2
2.5
2012 Q3
2.2
2012 Q4
2.4
2013 Q1
2.5
2013 Q2
2.4
2013 Q3
2.4
2013 Q4
1.9
2014 Q1
1.6
2014 Q2
1.6
2014 Q3
1.5
2014 Q4
1.1
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started