Suppose the Federal Reserve sets the real interest rate to 1.5%. Moreover, assume that there are no demand shocks, that b = 2.5, and that =0.02. If the resulting change in the inflation rate is +0.375 percentage points, what is the value of the parameter ? (Round to the nearest hundredth.) Hint: Use the IS and Phillips Curves to calculate your answer.

Suppose the Federal Reserve sets the real interest rate to 1.5%. Moreover, assume that there are no demand shocks, that b = 2.5, and that =0.02. If the resulting change in the inflation rate is +0.375 percentage points, what is the value of the parameter ? (Round to the nearest hundredth.) Hint: Use the IS and Phillips Curves to calculate your answer.

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter14: Money And The Economy

Section: Chapter Questions

Problem 10QP

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