EBK MODERN PRINCIPLES OF ECONOMICS
3rd Edition
ISBN: 9781319030926
Author: COWEN
Publisher: YUZU
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Chapter 35, Problem 3FT
Sub part (a):
To determine
The effect of positive potential growth shock, ignoring the possible effects of sticky wages and prices.
Sub part (b):
To determine
The impact on inflation, when the central bank keeps the AD fixed.
Sub part (c):
To determine
What should the central bank do to bring the inflation back to the initial point.
Sub part (d):
To determine
What should the central bank do to bring back the real growth rate.
Sub part (e):
To determine
Whether the central bank faces a cruel trade-off between inflation and real growth.
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Chapter 35 Solutions
EBK MODERN PRINCIPLES OF ECONOMICS
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