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Author Question: The policy of attempting to obtain a specific low level of inflation over the long run is referred ... (Read 37 times)

Hungry!

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on: Jun 30, 2018
The policy of attempting to obtain a specific low level of inflation over the long run is referred to as:
 
  A) inflation targeting. B) the seigniorage policy.
  C) the minimal inflation policy. D) price control.

Question 2

Suppose that C = Ca + 0.6y and a shock decreases Ca by 50 billion. Assuming there is no government involvement, by how much will equilibrium GDP decrease?
 
  What will be an ideal response?


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Chocorrol77

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Reply #1 on: Jun 30, 2018
Answer to Question 1

A

Answer to Question 2

In this case the multiplier is 1/(1 - 0.6 ) = 2.5. So output will fall by 125 billion.


Hungry!

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Reply 2 on: Jun 30, 2018
Thanks for the timely response, appreciate it

atrochim

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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