Question
Let's consider the recent slowdown in the rollout of COVID-19 vaccines. Suppose this news decreased optimism about the trajectory for the economy. Was inflation likely
Let's consider the recent slowdown in the rollout of COVID-19 vaccines. Suppose this news decreased optimism about the trajectory for the economy.
Was inflation likely above, below, or right at inflation expectations prior to the shock?
Based on the IS-LM-PC framework, should we expect inflation to increase, decrease, or remain the same in response to the optimism shock? Briefly explain.
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Economics of Strategy
Authors: David Besanko, David Dranove, Mark Shanley, Scott Schaefer
6th edition
978-1118273630, 111827363X, 978-1118319185
