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A) The change in output and interest rates began in T1 when consumer and mould we model this increased in response to rising stock market

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A) The change in output and interest rates began in T1 when consumer and mould we model this increased in response to rising stock market values. On an IS-LM diagram, would B) The central bank began to worry that the fast growth would eventually lead to rising prices. If their goal is to keep output stable, explain what type of open market operations they would use and how we would model this on our diagram i.e. which curve would shift, which way, and why. [7 pts] C) T2 in the above table indicates equilibrium Y and r after the central bank's policy had taken effect. Based on this information, has the change in the goods market or has change in the money market had a larger impact on output and the interest rate? Would you say that the central bank was successful in achieving their policy goals? [7 pts]

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