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

Question 196

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 4%,the central bank will set a real interest rate of ________%,and short-run equilibrium output will be equal to _________. A) 3;18,800 B) 4;20,000 C) 4;18,800 D) 5;18,000 E) 5;18,400
If inflation is 4%,the central bank will set a real interest rate of ________%,and short-run equilibrium output will be equal to _________.


A) 3;18,800
B) 4;20,000
C) 4;18,800
D) 5;18,000
E) 5;18,400

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