Question
In the basic New Keynesian model, when there is a liquidity trap, if the central bank promises a higher inflation in the future, we should
In the basic New Keynesian model, when there is a liquidity trap, if the central bank promises a higher inflation in the future, we should expect that ___________
A.output rises and inflation rises.
B.output falls and inflation rises.
C.output falls and inflation falls.
D.output and inflation stay the same.
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The Macro Economy Today
Authors: Bradley R. Schiller, Karen Gebhardt
14th edition
1259291820, 978-1259291821
