=+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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Macroeconomics

ISBN: 9781429240024

8th Edition

Authors: N Gregory Mankiw

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