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What Will an Increase in the Bank Rate When the SRAS

Question 64

Multiple Choice

What will an increase in the bank rate when the SRAS is relatively steep likely lead to?


A) a large drop in real GDP and a large drop in the price level
B) a small drop in real GDP and a large drop in the price level
C) a small drop in real GDP and a small increase in the price level
D) a small increase in real GDP and a large increase in the price level

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