Figure A
Can aggregate demand restraint cause painless disinflation?
| Real output | AS | AD1 | AD2 |
|---|---|---|---|
| 15,000 | 2% | 6.8% | 9.8% |
| 15,500 | 2% | 6.5% | 9.5% |
| 16,000 | 2% | 6.3% | 9.3% |
| 16,500 | 2% | 6.0% | 9.0% |
| 17,000 | 2% | 5.8% | 8.8% |
| 17,500 | 2% | 5.5% | 8.5% |
| 18,000 | 2% | 5.3% | 8.3% |
| 18,500 | 2% | 5.0% | 8.0% |
| 19,000 | 2% | 4.8% | 7.8% |
| 19,500 | 2% | 4.5% | 7.5% |
| 20,000 | 2% | 4.3% | 7.3% |
| 20,500 | 2% | 4.0% | 7.0% |
| 21,000 | 2% | 3.8% | 6.8% |
| 21,500 | 2% | 3.5% | 6.5% |
| 22,000 | 2% | 3.3% | 6.3% |
| 22,500 | 2% | 3.0% | 6.0% |
| 23,000 | 2% | 2.8% | 5.8% |
| 23,500 | 2% | 2.5% | 5.5% |
| 24,000 | 2% | 2.3% | 5.3% |
| 24,500 | 2% | 2.0% | 5.0% |
| 25,000 | 10% | 1.8% | 4.8% |
| 25,500 | 1.5% | 4.5% | |
| 26,000 | 1.3% | 4.3% | |
| 26,500 | 1.0% | 4.0% | |
| 27,000 | 0.8% | 3.8% | |
| 27,500 | 0.5% | 3.5% | |
| 28,000 | |||
| 28,500 | |||
| 29,000 | |||
| 29,500 | |||
| 30,000 | |||
| 30,500 | |||
| 31,000 | |||
| 31,500 | |||
| 32,000 | |||
| 32,500 |
Source: No real data – illustrative only.
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