Hi, could you read the question and show the answer (including drawing graph, processes, explain) (a)Inflation in
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Hi, could you read the question and show the answer (including drawing graph, processes, explain)
(a)Inflation in Classica is currently above the target range of its central bank. What does this tell you regarding Classica's likely output gap? Illustrate it using an AS-AD diagram, and briefly explain your diagram
(b)Your mother states that monetary policy is effective because firms quickly react to changes in interest rates by altering their investment decisions. Do you agree or disagree with her statement? Justify your answer.
Is money targeting a better tool for central banks to use in the highly recessionary COVID-19 period where inflation has essentially disappeared as a policy issue? Briefly explain your reasoning.
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