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 1%,the central bank will set a real interest rate of ________%,and short-run equilibrium output will be equal to _________.
A) 0;20,000
B) 1;20,000
C) 1;19,600
D) 2;15,000
E) 2;19,200

Question

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 1%,the central bank will set a real interest rate of ________%,and short-run equilibrium output will be equal to _________.
A) 0;20,000 
B) 1;20,000 
C) 1;19,600 
D) 2;15,000 
E) 2;19,200

Quizplus · Accepted Answer

The Answer of 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 1%,the central bank will set a real interest rate of ________%,and short-run equilibrium output will be equal to _________.
A) 0;20,000 
B) 1;20,000 
C) 1;19,600 
D) 2;15,000 
E) 2;19,200

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