Solved

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

Question 7

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 3%,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) 2.5;6,000 D) 2.5;3,000 E) 3;2,000
If inflation is 3%,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) 2.5;6,000
D) 2.5;3,000
E) 3;2,000

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q2: When actual inflation equals the value determined

Q3: Starting from a long-run equilibrium,immediate or eventual

Q4: Suppose that,in an economy,ADI = 800 +

Q5: When no output gap exists,actual output _

Q6: The long-run self-correcting mechanism that eliminates a

Q8: An increase in government purchases will cause

Q9: The short-run costs of disinflation are<br>A) higher

Q10: Low expected inflation leads to _ increases

Q11: An upward shift in the Bank of

Q12: When actual output equals potential output,there is