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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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