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Use the following information to work Problems 11 and 12. Many ways to blow up an economy

Use the following information to work Problems 11 and 12.

Many ways to blow up an economy

Excessive stimulus could bring inflation in the United States in the long-term, but for now, inflation is falling. Bond interest rates reflect inflation expectations that are within the Fed’s long-term target levels.

Source: Australian Financial Review, May 9, 2009

11.Explain why inflation was falling in 2009 and how excessive stimulus could bring inflation in the long term.

12.What does it mean to say that inflation expectations are within the Fed’s target levels?

Dec 05 2019 Read more Less More

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