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1)Can policy makers decrease inflation without causing a recession? If yes how and if no why not? 2)According to the rational-expectations approach, if everyone believes
1)Can policy makers decrease inflation without causing a recession? If yes how and if no why not?
2)According to the rational-expectations approach, if everyone believes that policymakers are committed to reducing inflation, the cost of reducing inflationthe sacrifice ratiowill be lower than if the public is skeptical about the policymakers' intentions. Why might this be true? How might credibility be achieved?
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