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Assume that Y = 1000 P = 5 M P Real money demand equals Preference for cash c = 10% Reserve coefficient equals 0

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Assume that Y = 1000 P = 5 M P Real money demand equals Preference for cash c = 10% Reserve coefficient equals 0 = 20% Real interest rate r = 3% and Expected inflation equals 2%. =Y (10 5* i) O -610 basis points XO-590 basis points O -390 basis points O-410 basis points Assume that the central bank increases the money supply with 2%. What is the impact on the nominal interest rate? The nominal interest rate changes with

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