An instrument rule is based on ________ of the economy while a targeting rule is based on ________ of the economy.
A) the current state; the previous state
B) a forecast; the previous state
C) the previous state; the current state
D) the current state; a forecast
E) a forecast; the current state
Question 2
Moving along the short-run Phillips curve, as the unemployment rate increases, the inflation rate
A) initially increases and then decreases.
B) remains unchanged.
C) increases.
D) decreases.
E) initially decreases and then increases.
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