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    Principles of Economics Study Set 12
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    Exam 24: The Economic Fluctuations Model
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    If Inflation Increases, the Central Bank Acts to Raise Interest
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If Inflation Increases, the Central Bank Acts to Raise Interest

Question 39

Question 39

Multiple Choice

If inflation increases, the central bank acts to raise interest rates in order to


A) increase the money supply.
B) reduce real GDP.
C) increase real GDP.
D) increase potential GDP.
E) reduce potential GDP.

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