If the central bank raises the inflation target by 3%, we would expect that: A. the real interest rate will decrease by less than 3% in the medium run B. the real interest rate will not change in the medium run C. the real interest rate will decrease by exactly 3% in the medium run D. the real interest rate will increase by less than 3% in the medium run E. the real interest rate will increase by exactly 3% in the medium run

If the central bank raises the inflation target by 3%, we would expect that: A. the real interest rate will decrease by less than 3% in the medium run B. the real interest rate will not change in the medium run C. the real interest rate will decrease by exactly 3% in the medium run D. the real interest rate will increase by less than 3% in the medium run E. the real interest rate will increase by exactly 3% in the medium run

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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