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e) Suppose there is a negative shock to short-run AS. Explain the difference in outcomes for inflation and output level if: 1) the Fed pursues

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e) Suppose there is a negative shock to short-run AS. Explain the difference in outcomes for inflation and output level if: 1) the Fed pursues their target inflation rate or 2) the Fed pursues potential output. If you want you may draw a graph to help with your explanation but you do not need to do so. ( 6 points) infiation Rate Inflation Rate. Output, Y

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