The inflation rate is 6 percent a year, the unemployment rate is 4 percent, and the economy
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The inflation rate is 6 percent a year, the unemployment rate is 4 percent, and the economy is at full employment. The Fed announces that it intends to slow the money growth rate to keep the inflation rate at 3 percent a year for the foreseeable future. People believe the Fed. Explain how unemployment and inflation change in the short run and in the long run.
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Because people believe the Fed they immediately adjust th...View the full answer
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Shameen Tahir
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