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1. Suppose the Central Bank sells government bonds. Use a graph of the money market to show what this does to the value of money.

1. Suppose the Central Bank sells government bonds. Use a graph of the money market to show what

this does to the value of money.

2.Nathalie makes payments on a car loan. If the price level a year ago was 120 and people expected it to rise to 125 but it actually rose to 128, what happened to the real value of Nathalie's payment as opposed to what he was expecting to happen? Express your answer to the nearest 100th.

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