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Suppose That,in an Economy,ADI = 800 + 0

Question 186

Multiple Choice

Suppose that,in an economy,ADI = 800 + 0.9Y - 20,000r,and the central bank acts according to the following monetary policy rule: Suppose that,in an economy,ADI = 800 + 0.9Y - 20,000r,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;8,000 B) 1;8,000 C) 1;6,000 D) 1.5;5,000 E) 1.5;8,000
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;8,000
B) 1;8,000
C) 1;6,000
D) 1.5;5,000
E) 1.5;8,000

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