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Assume that the central bank decreases the money supply. Draw a 4-panel diagram. For all graphs, label the initial equilibrium point A, the final equilibrium
Assume that the central bank decreases the money supply. Draw a 4-panel diagram. For all graphs, label the initial equilibrium point A, the final equilibrium as point C, and use point B to illustrate the impact of the exogenous change, (holding either r or Y constant).
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