Multiple Choice
If planned aggregate spending in an economy can be written as PAE = 15,000 + 0.6Y − 20,000r, and potential output equals 35,000, what real interest rate must the Federal Reserve set to bring the economy to full employment?
A) 2 percent
B) 3 percent
C) 4 percent
D) 5 percent
Correct Answer:
Verified
Correct Answer:
Verified
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