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Economics

Suppose the Fed announces an inflation target of 3.90%. Suppose real GDP is forecasted to grow by 2.93% and that the velocity of money has been stable. What is the largest money growth rate the Fed could implement and still achieve the above mentioned inflation target?

Suppose there is a mid-year revision of GDP forecasts that lowers the expected growth rate. Ceteris paribus, what impact will this have on the rate of inflation?

A) Inflation will be higher.

B) Inflation will be lower.

C) Inflation will be the same.

D) Inflation can be either higher or lower.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M92201732

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