A) What are the consequences of engaging in a contractionary monetary policy? B)The monetary policy agreement between
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Question:
A) What are the consequences of engaging in a contractionary monetary policy?
B)The monetary policy agreement between the RBNZ and the government states that the Reserve Bank should attempt to keep inflation between 1% and 3%. While the costs of high inflation are reasonably obvious, please explain why is it undesirable to have inflation rate of 0%.
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