Draw two graphs describing each case of how one might interpret the 2021 after effects of the
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Question:
Draw two graphs describing each case of how one might interpret the 2021 after effects of the 2020 Recession.
- Treat 2021 as a supply shock to inflation expectations as supply shortages are leading to increased inflation expectations.
- Draw what the monetary policy response of the Federal Reserve would be to potential stagflation in 2021 and 202 Be clear on what will happen to both the inflation gap and the output gap in the graph.
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