If a central bank reduced inflation

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Reference no: EM1319379

Q. a) If the Fed reduces inflation 1 percent (%) age point also this makes output fall 5 percent (%) age points also unemployment rises 2 percent (%) age points for one year Illustrate what is the sacrifice ratio?

b) If the Fed reduces inflation 1 percent (%) age point also this makes output fall 2 percent (%)age points also unemployment rises 3 percent (%) age points for six months Illustrate what is the sacrifice ratio?

c) If a central bank reduced inflation by 2 percent (%) age points also to made output fall by 3 percent (%) age points for 2 years also the unemployment rate rises from 3 percent (%) to 5 percent (%) for 2 years Illustrate what is the sacrifice ratio?

d) If the sacrifice ratio is 2, reducing the inflation rate from 10 percent (%) to 6 percent (%) Illustrate what would the percent (%) age of annual output require sacrificing?

Reference no: EM1319379

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