If the goal of a monetary policy was to stabliize output at full employment and promote price stability then what would that policy look like if the federal reserve thought the natural rate of employment was 5% when it was actually 6%. I don't see how this would affect price stability or how they would stabilize
If the goal of a monetary policy was to stabliize output at full employment and promote price stability then what would that policy look like if the federal reserve thought the natural rate of employment was 5% when it was actually 6%. I don't see how this would affect price stability or how they would stabilize
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter22: Money Growth And Inflation
Section22.1: The Classical Theory Of Inflation
Problem 1QQ
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Is it possible to graph this situation through aggregate demand and supply? I know this causes changes to inflation but does it affect supply or demand?
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