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Assume the money supply grows at a rate of > 0 initially. At some later time, an immediate decrease in the rate of growth of
Assume the money supply grows at a rate of > 0 initially. At some later time, an immediate decrease in the rate of growth of money supply is announced. In other words, the money supply will grow at a lower rate < . Mark ALL the CORRECT statements. a) Ination will increase. b) The real interest rate falls. c) The nominal interest rate falls. d) According to the Baumol-Tobin model, people will make more trips to the bank
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