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In the land of Myopia, inflation expectations are based on the inflation observed last year, while in the land of Memoria, expectations equal the average
In the land of Myopia, inflation expectations are based on the inflation observed last year, while in the land of Memoria, expectations equal the average of inflation observed over the last ten years.
- In which country is the sacrifice ratio likely to be greatest, holding all else constant?
- If you were advising the central bank on how to restore full employment in a recession, how would your advice to each of these countries differ?
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