Illustrate what entity establishes a cost ceiling

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Q. Does nominal interest rate adjust more than one-for-one or less than one-for-one to expected inflation? This deviation from classical dichotomy and Fisher effect is called "MundellTobin effect." How might you decide where MundellTobin effect is important in practice?

Q. Illustrate what entity establishes a cost ceiling and does it require government sanction for violators? Will it result in a surplus or a shortage?

Reference no: EM1367489

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