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

question 67

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:
If inflation is 3%,the central bank will set a real interest rate of ________%,and short-run equilibrium output will be equal to _________.

• A) 2;19,200
• B) 3;20,000
• C) 3;18,800
• D) 4;18,000
• E) 4;18,400

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