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28. In the IS-MP model, the Central Bank stabilizes GDP by shock, ā, is a. b. C. Raising; negative Maintaining constant; positive Reducing; negative. the interest rate when the aggregate demand d. Reducing; greater than one e. Raising; different from zero.

28. In the IS-MP model, the Central Bank stabilizes GDP by shock, ā, is a. b. C. Raising; negative Maintaining constant; positive Reducing; negative. the interest rate when the aggregate demand d. Reducing; greater than one e. Raising; different from zero.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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**Question 28:** In the IS-MP model, the Central Bank stabilizes GDP by ______ the interest rate when the aggregate demand shock, \( \bar{a} \), is _______. - a. Raising; negative - b. Maintaining constant; positive - c. Reducing; negative - d. Reducing; greater than one - e. Raising; different from zero **Question 29:** Money demand is a ______ function of the ______ interest rate. - a. decreasing; real - b. increasing; real - c. increasing; nominal - d. decreasing; nominal - e. Non-monotone; real *Note: The questions focus on understanding the relationship between monetary policy, interest rates, and aggregate demand in the context of the IS-MP model, as well as the nature of money demand in relation to interest rates.*
Transcribed Image Text:**Question 28:** In the IS-MP model, the Central Bank stabilizes GDP by ______ the interest rate when the aggregate demand shock, \( \bar{a} \), is _______. - a. Raising; negative - b. Maintaining constant; positive - c. Reducing; negative - d. Reducing; greater than one - e. Raising; different from zero **Question 29:** Money demand is a ______ function of the ______ interest rate. - a. decreasing; real - b. increasing; real - c. increasing; nominal - d. decreasing; nominal - e. Non-monotone; real *Note: The questions focus on understanding the relationship between monetary policy, interest rates, and aggregate demand in the context of the IS-MP model, as well as the nature of money demand in relation to interest rates.*
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