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16 Suppose that the RBA decides to increase the interest rate.a What will happen to the money supply? Illustrate your answer with an appropriate diagram.b
16 Suppose that the RBA decides to increase the interest rate.a What will happen to the money supply? Illustrate your answer with an appropriate diagram.b What is the effect of this policy on the interest rate in the long run? How do you know?c What characteristic of the economy makes the short-run effect of monetary policy on the interest rate different from the long-run effect
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