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1. When discussing the Investment Savings curve, we talked about the government and tax multipliers. If C(Y - T) = 10 +0.75(Y -T)and I(r) =

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1. When discussing the Investment Savings curve, we talked about the government and tax multipliers. If C(Y - T) = 10 +0.75(Y -T)and I(r) = 345 - 14r, what is the government multiplier 2. Suppose the Central Bank of a country uses rule-based policy. Their rule is to maintain inflation at 3.5% (x, = 3.5), and expected inflation is 3.5% (x; = 3.5). Suppose there is a shock and unemployment increases by 3%. Can the Central Bank maintain their rule and mitigate the unemployment shock if the Phillips Curve is given by = = ; - (u; - u)? O A. Yes O B. No O C. Maybe so (hint: this is not the answer)

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