1. Predict what will happen to aggregate output and the price level if the Federal Reserve increases the money supply at the same time that Congress implements an income tax cut. 2. Suppose that the...

1. Predict what will happen to aggregate output and the price level if the Federal Reserve increases the money supply at the same time that Congress implements an income tax cut.

2. Suppose that the public believes that a newly announced anti-inflation program will work and so lowers its expectations of future inflation.

May 18, 2022

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1. Predict what will happen to aggregate output and the price level if the Federal Reserve increases the money supply at the same time that Congress implements an income tax cut. 2. Suppose that the...

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