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maryanne.jones3 maryanne.jones3
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A month ago
Imagine a central bank that wants the inflation rate to be 2%. In this country real GDP growth was 4%, but then suddenly slowed to 2%. If the central bank continued to grow the money supply at the rate consistent with 2% inflation and 4% real GDP growth, what will happen?

▸ Inflation will undershoot by 2%.

▸ Inflation will stay at 2%.

▸ Inflation will overshoot by 3%.

▸ Inflation will overshoot by 2%.
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Macroeconomics


Edition: 3rd
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yolinessyoliness
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A month ago
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Inflation will overshoot by 2%.

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