Question: Suppose two countries have identical aggregate demand curves and potential levels of output, and is the same in both countries. Assume that in 2016,

Suppose two countries have identical aggregate demand curves and potential levels of output, and γ is the same in both countries. Assume that in 2016, both countries are hit with the same negative supply shock. Given the table of values below for inflation in each country, what can you say, if anything, about the credibility of each country's central bank? Explain your answer.

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