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What policy should a government implement to keep price level constant following a positive demand shock? i.e. keep the price level constant in the inflationary
What policy should a government implement to keep price level constant following a positive demand shock? i.e. keep the price level constant in the inflationary gap.
What policy should a government implement to keep the price level constant following a negative supply shock? In this case, there is a recessionary gap and the government wants to keep the price level at the same point it is at in the recessionary gap.
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