Essay
Answer the questions below:
(A)Is there a unique rate of inflation that corresponds to long-run equilibrium? Explain. What determines the rate of inflation when the economy is at long-run equilibrium?
(B)Suppose the central bank is interested in stimulating growth in the economy. Should it aim for a higher or lower target inflation rate? Will higher growth be achieved in the short run and the long run?
Correct Answer:
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(A)No. The target rate of inflation is t...View Answer
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