Solved: Why might the federal reserve miss the inflation, Macroeconomics

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Why might the federal reserve miss the inflation

Question 1: Suppose that the Fed Reserve adopts an inflation targe of 3% for its monetary policy. If the long run growth rate of real GDP(Y) is 2%, then at what rate would the quantity of money (or money supply) have to grow to meet this inflation target?

Question 2: In the short run, why might the Federal Reserve miss their inflation target of 3%?

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Macroeconomics: Why might the federal reserve miss the inflation

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