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Please answer the following questions: a. Explain the danger of deflation using fisher equation (use equation to explain). b. Using monetary policy rule, compute the

Please answer the following questions:

a. Explain the danger of deflation using fisher equation (use equation to explain).

b. Using monetary policy rule, compute the level of nominal interest rate when the inflation rate is 6.8% and where we assume:

r=2%r=2%m=1m=1

Target inflation = 2%

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