In its statement dated June 14, 2017, the Federal Open Market Committee indicated that inflation “is running somewhat below 2%.” Go to http://research.stlouisfed.org/fred2/, and click on the Series ID link “CPIAUCSL” (Consumer Price Index for All Urban Consumers: All Items-SA). Then click on the link “Percent Change from Year Ago.” What has happened to the inflation rate since the time of the last reported value in Figure 16?

Figure 16

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Inflation Rate, (percent) Step 1. Asset purchases lower shifting AD to the right... LRAS AD AD 2 Step 2. and the rise in expected inflation shifts AS up,... AS AS, Step 3. increasing 2 2 output and inflation. YP=Y Aggregate output, Y ($ trillions)