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Question: question 1922 both advanced economies and developing countries have experienced...

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Question 19-22 Both advanced economies and developing countries have experienced a decrease in in flation since the 1980s. This question considers how the choice of policy regime has influenced this global disinflation 6 19. The Swiss Central Bank currently targets its money growth rate to achieve policy objectives. Suppose Switzerland has output growth of 3% and money growth of 8% each year. What is Switzerlands inflation rate in this case? (a) 3% (b) 4% (c) 5% (d) Cannot tell with given information 20. Like the Federal Reserve, the Reserve Bank of New Zealand uses an interest rate target. In 1997, New Zealand adopted a policy agreement that required the bank to maintain an inflation rate no higher than 2.5%. What interest rate targets would achieve this objective? Suppose the world real interest rate is 1.5%. (a) 3% (b) 4% (c) 5% (d) Cannot tell with given information

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