(e) The current rate of inflation exceeds the target inflation rate by 2 percent and there are no shocks to the economy. If m=0.25,6=0.5, and = 0.5, what is the change in inflation?
(e) The current rate of inflation exceeds the target inflation rate by 2 percent and there are no shocks to the economy. If m=0.25,6=0.5, and = 0.5, what is the change in inflation?
Chapter7: Unemployment And Inflation
Section: Chapter Questions
Problem 4.10P
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