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5.Monetary policy: An economy is facing a recessionary gap shown in graph below. How should the Central Bank react using each of the 3 monetary
5.Monetary policy:
An economy is facing a recessionary gap shown in graph below. How should the Central Bank react using each of the 3 monetary policy tools to eliminate the recessionary gap?(9 points)
a) Open Market operations:
b) Discount rate:
c) Required Reserve Ratio:
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