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2. Assume the monetary policy curve to be r=1.5+0.75 b. Calculate the real interest rate when inflation rate is 2%,3%, and 4% ( =2,3 and

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2. Assume the monetary policy curve to be r=1.5+0.75 b. Calculate the real interest rate when inflation rate is 2%,3%, and 4% ( =2,3 and 4 in the equation) c. Draw the MP curve d. Assume that the Fed change the MP curve to r=2.5+0.75. Calculate the real interest rate when inflation rate is 2%,3%, and 4% and draw the new MP curve. e. Does the new curve represent tightening or loosening of the monetary policy? f. What is the difference between automatic and autonomous monetary policy responses

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