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Suppose we start at the full-employment, long-run equilibrium of Ch. 4 (with flexible wages). Suppose also we had seen several periods of 0 inflation. If
Suppose we start at the full-employment, long-run equilibrium of Ch. 4 (with flexible wages). Suppose also we had seen several periods of 0 inflation. If we subsequently had an increase in aggregate demand, then Group of answer choices in the short run we would see inflation and a decrease in unemployment. in the long run we would see no change in inflation and a decrease in unemployment. in the long run we would see deflation and unemployment. in the short run we would see deflation and an increase in unemployment. in the short run we would neither see a change in inflation nor unemployment
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