Suppose the economy exhibits a large, unexpected increase in productivity growth that lasts for a decade. Policy makers are (quite reasonably) slow to learn what has happened to potential output and incorrectly interpret the increase in output as a boom that leads actual output to exceed potential. Suppose they adjust macroeconomic policy so that the mis-measured level of short-run output is zero. 1. What happens to the true amount of short-run output Y 2. What happens to inflation over time? 3. How does you answer differ if the firms and market share or does not share the same misbelief by the policy maker?