1.Money Neutrality, Long-Run Inflation, and the Natural Rate. Explain carefully the relationship between the concept of monetary neutrality and the idea that the natural rate is independent of the...

1.Money Neutrality, Long-Run Inflation, and the Natural Rate. Explain carefully the relationship between the concept of monetary neutrality and the idea that the natural rate is independent of the longrun inflation rate.

2. Nominal Rates and Natural Rates. If the Federal Reserve calculates the natural rate of interest to be 2.5 percent and they expect 2.3 percent inflation, what nominal rate should they aim for? Related to Application 2 on page 364.