Suppose the central bank expands QE and, as a result, expectations of a rise in the price
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Suppose the central bank expands QE and, as a result, expectations of a rise in the price level increase. What will happen to output and the price level in the short run? Compare this result to the outcome if the central bank expanded QE but the public didn’t change its expectation of the price level.
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If the central bank expands quantitative easing QE and as a result expectations of a rise in the price level increase the shortrun effects on output a...View the full answer
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