You are the central bank Governor of the country of Syldavia. Syldavia is facing rampant inflation running at 15% per year. The President of Syldavia, who never took Econ201, asks you to propose a policy that will lower inflation. Explain in a letter to the President what steps you propose to take and why. Start with a Phillips curve of the Syldavian economy at present, describe your policy clearly and in detail and how it will work and then show the effect of your policy using AS/AD analysis. Finally, show the President what the economy will look like after the policy has taken effect by means of a Phillips curve. End with a conclusion describing the trade-off Syldavia would have to accept.

words plus diagrams.

Clearly explained analysis Accurate/Neat diagrams