Using the expectations-augmented phillips curve

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A new Fed governor argues during FOMC meetings that the Fed has not sufficiently achieved the goal of helping the economy reach its potential level of output. She asks the committee to be more aggressive, using expansionary monetary policy to increase the growth rate of output. What are the likely consequences of such a policy? Illustrate your answer using the expectations-augmented Phillips curve.

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Reference no: EM13817310

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