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all question are to be answer

Date Posted: 28/11/2020
Category: Economics
Due Date: 29/11/2020
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a) “If autonomous spending falls, the central bank should lower its inflation target in order to stabilize inflation.” Is this statement true, false, or uncertain? Explain your answer. b) Why does the divine coincidence simplify the job of policymakers? For each of the following shocks, describe how monetary policymakers would respond (if at all) to stabilize economic activity. Assume the economy starts at a long-run equilibrium. A.Consumers reduce autonomous consumption. B.Financial frictions decrease. C.Government spending increases. D.Taxes increase. E.The domestic currency appreciates.
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  • if autonomous spending falls, the central bank should lower its inflation target in order to stabilize inflation. T, F, Uncertain? (False)
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