What is the cumulative loss in output recession

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Suppose the economy is at its natural rate of unemployment of 6% with a real output of $900 billion, but policymakers plan to reduce inflation from 8 percent to 4 percent gradually over a period of six years by creating a recession. 37. If the sacrifice ratio is 3, relative to maintaining full employment, what is the cumulative loss in output this recession will entail?

Reference no: EM132606956

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