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Author Question: Refer to Figure 12.2. Suppose the economy is initially above potential GDP, and the actual inflation ... (Read 100 times)

K@

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on: Jun 30, 2018
Refer to Figure 12.2. Suppose the economy is initially above potential GDP, and the actual inflation rate is greater than the expected inflation rate.
 
  If the Fed wants to achieve the goal of price stability, this would be represented by a movement on the Phillips curve from A) point A to point B.
  B) point C to point B.
  C) point B to point A.
  D) point A to point B to point C.

Question 2

The central bank in the New Keynesian model pursues a policy of
 
  A) fixed money supply.
  B) inflation between 2 and 3.
  C) zero inflation.
  D) targeting the market interest rate.


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kingfahad97

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

A

Answer to Question 2

D


K@

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Reply 2 on: Jun 30, 2018
YES! Correct, THANKS for helping me on my review

Joy Chen

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

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