If $\bar { r } = 2 \% , \bar { m } = .75$ , and $\bar { \pi } = 2 \%$ , what would the simple monetary rule dictate the real interest be if $\bar { \pi } _ { t } = 5 \%$ ? If $\pi _ { t } = 2 \% , \pi _ { t } = - 2 \%$ ? In each case, is the economy in an expansion, recession, or in the long run?

Question

If $\bar { r } = 2 \% , \bar { m } = .75$  , and $\bar { \pi } = 2 \%$  , what would the simple monetary rule dictate the real interest be if $\bar { \pi } _ { t } = 5 \%$  ? If $\pi _ { t } = 2 \% , \pi _ { t } = - 2 \%$   ? In each case, is the economy in an expansion, recession, or in the long run?

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The Answer of If $\bar { r } = 2 \% , \bar { m } = .75$  , and $\bar { \pi } = 2 \%$  , what would the simple monetary rule dictate the real interest be if $\bar { \pi } _ { t } = 5 \%$  ? If $\pi _ { t } = 2 \% , \pi _ { t } = - 2 \%$   ? In each case, is the economy in an expansion, recession, or in the long run?

If rˉ=2%,mˉ=.75\bar { r } = 2 \% , \bar { m } = .75rˉ=2%,mˉ=.75

If $\bar { r } = 2 \% , \bar { m } = .75$