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a) Derive the slopes of Phillip's curve (PC, thereafter) and the Monetary Rule (MR, henceforth) curve. What economic implication do you get from these slopes
a) Derive the slopes of Phillip's curve (PC, thereafter) and the Monetary Rule (MR, henceforth) curve. What economic implication do you get from these slopes of these two curves?
b) Consider the utility loss function of the central bank; where it only cares about reducing the output gap. Now, due to the ongoing pandemic, economy is going through the recession along with the disinflation. In a graph consisting the utility loss function of Central Bank, show how central bank will accommodate the recession?
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