Question

relationship between output gap, inflation and monetary policy​

Answer 1

Answer:

A positive output gap implies an overheating economy and upward pressure on inflation. ... A positive output gap might prompt policymakers to cool an overheating economy by raising policy rates, while a negative output gap might prompt monetary stimulus

Answer 2

Answer:

A positive output gap implies an overheating economy and upward pressure on inflation. ... A positive output gap might prompt policymakers to cool an overheating economy by raising policy rates, while a negative output gap might prompt monetary stimulus..