The Governing Council is presented with data and analysis that indicates the output gap has changed from

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The Governing Council is presented with data and analysis that indicates the output gap has changed from being close to 0 to now being large and negative. Additionally, inflation is 1.2% instead of the target of 2%. Predict how the Governing Council is likely to change its interest rate target by changing: (1) the operating band and (2) the overnight rate. Explain how altering these rates can help close the output gap.

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Principles Of Macroeconomics

ISBN: 9781982166649

1st Canadian Edition

Authors: Betsey Stevenson, Justin Wolfers, Philip Oreopoulos, Kevin Milligan

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