If more firms have to set prices before macroeconomic events unfold, then an increase in a will initially cause O A smaller increase in short-run output and a smaller increase in inflation O None of the options is correct O A larger increase in short-run output and a smaller increase in inflation. O A smaller increase in short-run output and a larger increase in inflation. A larger increase in short-run output and a larger increase in inflation.The year is 2040 in the United States. The interest rate on a one-year bond ig949 = 3%. The annual interest rate on a two-year bond is 7 m=2 2040 = 2%. The annual interest rate on a three-year bond is 1 m=23 2040 = 4%. According to the expectations hypothesis, what is the market expecting the one-year rate to be in 20427 That is, what is the value for 25, ? 1% 9% 7% D 4% 3% 2% 6% ) 10% 5% 0% 8% Note: Many questions will use the same set of equations. The economy of Colombia is characterized by the following relations. AnlS Curve Y, =@ b(R; 7) A Fisher equation: Ry = i; + f; Eympi A monetary policy rule: iy = 7 + m(m @) + Eymaq A Phillips curve: m; = E;_1m + vY; An assumption for inflation expectations: E_ 17T = Ty Where f; is a shock to interest rate spreads. f; takes positive values when banks are having financial distress in their balance sheets. Question: Will f; appear directly in the aggregate demand (AD) or in the aggregate supply (AS) curve? O Aggregate Demand (AD) O Aggregate Supply (AS) () None of the other answers is correct (O in Both the AD and AS curves