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Question 20 1 pts Consider an economy producing at Yo = 0 and v = 1/5. The inflation rate at t = 0 is To
Question 20 1 pts Consider an economy producing at Yo = 0 and v = 1/5. The inflation rate at t = 0 is To = 2%. Now, suppose the economy is hit by an inflation shock 01 = 02 = 2.5%. The shock is temporary and Ot = 0 for t > 2. For the duration of the inflation shock, the economy is in a recession with Y1 = Y2 = -1.5%, which ends with Y? = 0. Based on this information, you know that the inflation rate 73 is percent
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