Suppose the inflation rate has been 15 percent for the past four years. The unemployment rate is

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Suppose the inflation rate has been 15 percent for the past four years. The unemployment rate is currently at the natural rate of unemployment of 5 percent. The Federal Reserve decides that it wants to permanently reduce the inflation rate to 5 percent. How can the Fed use monetary policy to achieve this objective? Be sure to use a Phillips curve graph in your answer.

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Economics

ISBN: 978-0134106243

6th edition

Authors: R. Glenn Hubbard

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