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Consider the following IS-LM model: C = 218+0.46YD T= 264 / = 158 +0.21Y - 1,132/ i= 0.04 G = 330 MIP = 2.1 Y

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Consider the following IS-LM model: C = 218+0.46YD T= 264 / = 158 +0.21Y - 1,132/ i= 0.04 G = 330 MIP = 2.1 Y -8,090/ The /S equation is determined to be Y = 1771.39- 3430.30i. The LM equation is given as i = 0.04 Initial equilibrium values of Y, C, /, and the real money supply are calculated as Y = 1,634 C = 848 / = 456 M/P = 3,108 Now suppose that the central bank cuts the interest rate to 2%. In a graph of the /S-LM model, this causes the LM curve to shift downward . Following the change in the interest rate to 2%, the value of equilibrium real output becomes 1703 . (Round your response to the nearest integer.) Following the change in the interest rate to 2%, the values of the new equilibrium C and / are: C = 880 . (Round your responses to the nearest integer.) /= 493 . (Round your responses to the nearest integer.)Which of the following statements is not consistent with the effects of an expansionary monetary policy? As the interest rate falls, O A. the real demand for money rises. B. equilibrium investment may increase, decrease, or remain unchanged. O C. equilibrium consumption increases. O D. the money supply increases and equilibrium real output increases. With the central bank's expansionary monetary policy, the value of the real money supply becomes . (Round your response to the nearest integer.)

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