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

Question 51

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 2%,the central bank will set a real interest rate of ________%,and short-run equilibrium output will be equal to _________. A) 0;8,000 B) 2;4,000 C) 2;6,000 D) 2.5;3,000 E) 2.5;8,000
If inflation is 2%,the central bank will set a real interest rate of ________%,and short-run equilibrium output will be equal to _________.


A) 0;8,000
B) 2;4,000
C) 2;6,000
D) 2.5;3,000
E) 2.5;8,000

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