Question
1.Which would you recommend be used to offset the effect of a temporary shock to output-fiscal or monetary policy? Discuss . 2. Under what conditions
1.Which would you recommend be used to offset the effect of a temporary shock to output-fiscal or monetary policy? Discuss.
2.Under what conditions would a permanent supply shock cause a temporary increase in the inflation rate?
3.Real business cycle theory argues that money is very unimportant and that economic fluctuations are due largely to changes in technology. Explain.
4."Credibility is extremely important in the conduct of monetary policy". Discuss on the statement.
5.Does empirical evidence support the rational expectations result that anticipated monetary policy should have no effect on output? Explain
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