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In an Economy Where Aggregate Spending Is Given by Y

question 24

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In an economy where aggregate spending is given by Y = 3,000 + .75Y - 10,000 r, the central bank is currently setting the interest rate at 0.05 (5 percent) . If potential output equals 10,800, the central bank must ____ the interest rate to close the _________ gap.


Definitions:

Fertility

The natural capability of giving life; in humans, it refers to the ability to reproduce.

Food Foragers

Individuals or groups who obtain food by collecting wild plants and hunting animals, rather than through agriculture or animal husbandry.

Paleolithic Prescription

An approach to health and diet that advocates for eating and exercising in ways that mimic the habits of our Paleolithic ancestors.

Melvin Konner

An anthropologist and author known for his work on the evolution of human behavior, child development, and the integration of biological and cultural perspectives in the study of humanity.

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