2. Because of price stickiness, the Keynesian model pre dicts that an increase in the growth rate...
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2. Because of price stickiness, the Keynesian model pre dicts that an increase in the growth rate of money will lead to higher inflation only after some lag, when firms begin to adjust their prices. Using data since 1960, graph the inflation rate and the rate of growth of M2. Prior to 1980, is it true that increases in money growth only affected inflation with a lag? What has happened since 1980?
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Macroeconomics
ISBN: 9781292446127
11th Edition
Authors: Andrew B. Abel, Ben S. Bernanke, Dean Croushore
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