=+3. Lets examine how the goals of the Fed infl uence its response to shocks. Suppose that
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=+3. Let’s examine how the goals of the Fed infl uence its response to shocks. Suppose that in scenario A the Fed cares only about keeping the price level stable and in scenario B the Fed cares only about keeping output and employment at their natural levels. Explain how in each scenario the Fed would respond to the following.
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