In an economy in which planned aggregate expenditure is given by PAE = 5,500 + 0.6Y - 20,000r,the central bank is currently setting the interest rate at 0.05 (5%).If potential output equals 10,750,the central bank must ________ the interest rate to ________ to restore full employment.
A) lower;3%
B) lower;4%
C) raise;6%
D) raise;7%
E) raise;8%

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The Answer of In an economy in which planned aggregate expenditure is given by PAE = 5,500 + 0.6Y - 20,000r,the central bank is currently setting the interest rate at 0.05 (5%).If potential output equals 10,750,the central bank must ________ the interest rate to ________ to restore full employment.
A) lower;3%
B) lower;4%
C) raise;6%
D) raise;7%
E) raise;8%

In an Economy in Which Planned Aggregate Expenditure Is Given