Answer the Questions Below

question 134

Essay

Answer the questions below:
(A)What should the Fed do if inflation is at the target rate and the GDP gap is positive? Explain using an aggregate demand inflation diagram.
(B)What should the Fed do if inflation is below the target rate and the GDP gap is positive? Explain using an aggregate demand inflation model.

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Definitions:

Immigrants

Immigrants are individuals who move to a new country with the intention of settling there, contributing to the labor force, cultural diversity, and population changes.

Emigration

The act of leaving one's country to settle in another, which can have significant impacts on the labor force and economy of both the home and host country.

Immigration

The act of relocating to another country with the intention of living there indefinitely.

Marginal Benefits

The additional benefits received from consuming one more unit of a good or service.