d) Explain two channels through which inflation pressures can be reduced by changes in each of: (a) fiscal policy and (b) monetary policy. Explain two
d) Explain two channels through which inflation pressures can be reduced by changes in each of: (a) fiscal policy and (b) monetary policy. Explain two reasons why in practice it is hard to get the magnitude of the policy response exactly right to reduce inflationary pressures. (8 marks)
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