Question: Question 3 Inflation equals expected inflation when _____________________________________________ According to adaptive expectations, inflation = _______________________________________ Question 4 Suppose that there is an adverse supply shock,

Question 3 Inflation equals expected inflation when _____________________________________________ According to adaptive expectations, inflation = _______________________________________ Question 4 Suppose that there is an adverse supply shock, and the Fed responds with accommodative policy what will happen to Output______________________________ Inflation _________________________________ Suppose that there is an adverse supply shock, and the Fed responds with nonaccommodative policy what will happen to Output______________________________ Inflation _________________________________

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