Question
5. Consider the Phillips curve. The inflation shock is zero, the magnitude of inflation's sensitivity to the deviation of output from potential is 1. Last
5. Consider the Phillips curve. The inflation shock is zero, the magnitude of inflation's
sensitivity to the deviation of output from potential is 1. Last period's inflation was -2%.
What would have to be to see deflation in the economy again this year?
a. Below -20%.
b. Below -2%.
c. Below 2.3%.
d. Below 0.02%.
e. Below 2%.
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Fundamentals of Managerial Economics
Authors: Mark Hirschey
9th edition
324584830, 978-0324588781, 032458878X, 978-0324584837
