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What average annual inflation rate would monetarist expect

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Reference no: EM13834867

1) What policy rule do monetarists believe the Fed should follow? What are the major assumptions underlying this policy prescription?

2) What average annual inflation rate would a monetarist expect if the Fed maintained a growth rate of M2 = 10% per year for a three year period? (Assume that the monetarist felt that the long run average growth rate of RGDP was 3%)

Average annual inflation rate = 10-3 =7%

Reference no: EM13834867

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