If Planned Aggregate Expenditure in an Economy Can Be Written

question 71

Multiple Choice

If planned aggregate expenditure in an economy can be written as PAE = 15,000 + 0.6Y - 20,000r,and potential output equals 35,000,what real interest rate must the central bank set to bring the economy to full employment?

• A) 2%.
• B) 3%.
• C) 4%.
• D) 5%.
• E) 6%.

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