Predict how the Fed would likely respond if the output gap became more positive, so that output

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Predict how the Fed would likely respond if the output gap became more positive, so that output moved from being 0.1% above potential output to being 3% above potential output, and inflation rose above its 2% target rate. How would you expect unemployment to change over the next year or two in response to the Fed’s actions?

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Principles Of Economics

ISBN: 9781319330156,9781319419769

2nd Edition

Authors: Betsey Stevenson, Justin Wolfers

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