Consider the data in the Focus box, Deflation in the Great Depression. a. Do you believe that

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Consider the data in the Focus box, "Deflation in the Great Depression."

a. Do you believe that output had returned to its potential level in 1933?

b. Which years suggest a deflation spiral as described in Figure 9-3?

Figure 9-3

image text in transcribed

c. Make the argument that if the expected level of inflation had remained anchored at the actual value of inflation in 1929, the Great Depression would have been less severe.

d. Make the argument that a substantial fiscal stimulus in 1930 would have made the Great Depression less severe.

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Macroeconomics

ISBN: 9781292160504

7th Global Edition

Authors: Olivier J. Blanchard

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Question Posted: Feb 29, 2024 03:01 AM

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Consider the data in the Focus box, Deflation in the Great Depression. a. Do you believe that

Question:

Output, Y Change in inflation rate -=(-1) 0 x Y PC Output, Y Y Y IS Real interest rate, r o

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Macroeconomics

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