Consider the following monetary policy rules for two countries, A and B:
A: interest rate = 1.8 (inflation - 3) + 3
B: interest rate = 2 (inflation - 3) + 4
(A) Graph the palicy rules. If the inflatan rate is 2 percent in toth cauntres, what is the interest rate in each caunty?
(B) Which of the twa cauntries has a higher tolerance for inflation? Egiglain.

Question

Consider the following monetary policy rules for two countries, A and B:
A: interest rate = 1.8 (inflation - 3) + 3
B: interest rate = 2 (inflation - 3) + 4
 (A) Graph the palicy rules. If the inflatan rate is 2 percent in toth cauntres, what is the interest rate in each caunty?
(B) Which of the twa cauntries has a higher tolerance for inflation? Egiglain.

Quizplus · Accepted Answer

The Answer of Consider the following monetary policy rules for two countries, A and B:
A: interest rate = 1.8 (inflation - 3) + 3
B: interest rate = 2 (inflation - 3) + 4
 (A) Graph the palicy rules. If the inflatan rate is 2 percent in toth cauntres, what is the interest rate in each caunty?
(B) Which of the twa cauntries has a higher tolerance for inflation? Egiglain.

Consider the Following Monetary Policy Rules for Two Countries, a and B