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Suppose That,in an Economy,ADI = 5,000 + 0

Question 22

Multiple Choice

Suppose that,in an economy,ADI = 5,000 + 0.75 Y - 10,000r,and the central bank acts according to the following monetary policy rule: Suppose that,in an economy,ADI = 5,000 + 0.75 Y - 10,000r,and the central bank acts according to the following monetary policy rule: If inflation is 1%,the central bank will set a real interest rate of ________%,and short-run equilibrium output will be equal to _________. A) 0;20,000 B) 1;20,000 C) 1;19,600 D) 2;15,000 E) 2;19,200
If inflation is 1%,the central bank will set a real interest rate of ________%,and short-run equilibrium output will be equal to _________.


A) 0;20,000
B) 1;20,000
C) 1;19,600
D) 2;15,000
E) 2;19,200

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