1. (10 points) Derive the long-run equilibrium for the dynamic AD-AS model. Assume there are no shocks to demand or supply

1. (10 points) Derive the long-run equilibrium for the dynamic AD-AS model. Assume there are no shocks to demand or supply

1. (10 points) Derive the long-run equilibrium for the dynamic AD-AS model. Assumethere are no shocks to demand or supply (t = vt = 0) and ination has stabilized(t = t1), and then use the ve equations to derive the value of each variable in themodel. Be sure to show each step you follow.


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