What are the costs of inflation

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Be able to use the AE/PC model to analyze: counter-cyclical policy, disinflation, response to supply shocks. What is the difference between accomodating and non-accomodating responses to supply shocks? Explain how the Fed’s concern with keeping Y close to Y* comes into conflict with the goal of price stability. What are the costs of inflation?

Reference no: EM131159472

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