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How is monetary policy determined in the New Keynesian model? What is the central bank's target, and what does the central bank control directly? In
How is monetary policy determined in the New Keynesian model? What is the central bank's target, and what does the central bank control directly?
In the New Keynesian model, monetary policy is determined by the central bank in the money market, which targets
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an inflation rate by controlling the money demand.
an interest rate by controlling the money demand.
a GDP growth rate by controlling the money supply.
an interest rate by controlling the money supply.
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