Problem
1. Can the Fed permanently increase the level of aggregate output? Explain why or why not.
2. Why is the inflation rate high in the long run if the central bank cannot commit itself?
3. Explain why, if the central bank is concerned with its reputation, inflation can be low in the long run.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.