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Exhibit 24-5 -Suppose the Central Bank Decides to Switch from Policy Rule

Question 132

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Exhibit 24-5 Exhibit 24-5 -Suppose the central bank decides to switch from policy rule A to policy rule B as shown in the table below.Use the analysis presented in the text to explain what will happen to the AD curve.
-Suppose the central bank decides to switch from policy rule A to policy rule B as shown in the table below.Use the analysis presented in the text to explain what will happen to the AD curve. Exhibit 24-5 -Suppose the central bank decides to switch from policy rule A to policy rule B as shown in the table below.Use the analysis presented in the text to explain what will happen to the AD curve.

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As a result of the switch in the policy ...

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