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Unformatted text preview: as to stablize GDP Destablizer: Without deficit Targeting ( see Figure 16.2 on page 341 in the text ) The Fed's Response to High Output/High Inflation During periods of high output/high inflation, the economy is on the relatively steep portion of the AS curve. In this case, the Fed is likely to contract the money supply. See Figure 16.4 on page 343 in the text for the graph Monetary Policy Fiscal Policy Get rid of deficit by reaching full employment Policy Issues Recognition Implementation Time lag for effectiveness...
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This note was uploaded on 02/21/2008 for the course ECON 4.3 taught by Professor Fox during the Spring '99 term at Pennsylvania State University, University Park.
- Spring '99