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The Graph Above Shows a Central Bank Targeting an Interest

Question 3

Multiple Choice

The graph above shows a central bank targeting an interest rate iT. This policy is said to be destabilizing since the change in output from _____ is greater than the change in output from


A) A to B, B to C.
B) A to C, A to B.
C) A to C, B to C.
D) none of the above.

Correct Answer:

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