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Question: You are a manager for a firm in an industry where prices have been flat for the past several years. The rate of inflation now rises from 2% to 4%, but the FOMC does not immediately boost the funds rate. Is this a good time to raise your prices? If so, how much should they be increased? To what extent does your answer depend on what happens to the value of the dollar? (Hint: what caused inflation to rise?)

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M93115197

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