US inflation kept rising during 2022 until it peaked at 9.1% in June 2022 -- a 40-year
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US inflation kept rising during 2022 until it peaked at 9.1% in June 2022 -- a 40-year high. What type of gap does the US have and what type of expectations? Use the IS-LM-"PC" model to explain why a recession (a "hard landing") might be necessary to get down to "acceptable levels." Use directional arrows in the "Fed" equation to describe what the Fed is doing during the periods when the gap exists, and when it ultimately acts to not only "stabilize " (text pp. 181-182), but also to get it to an "acceptable level." No calculations are necessary. (Note that in October US inflation was 7.7%.)
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International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
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