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Question 35 4 pts Consider the Phillips curve in the graph below. Start from long run equilibrium at point Assume the policy maker wants to
Question 35 4 pts Consider the Phillips curve in the graph below. Start from long run equilibrium at point Assume the policy maker wants to reduce inflation to x2 and that the public adopts rational expectations. After the policy change the economy will move to point Assuming no further policy intervention, in the following period the economy will be at point Assume instead that the policy maker wants to intervene to keep inflation at the economy will be then be at point G 14 F 13 D E A =T 12 B ts H PC 0 Uz u U2
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