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Please just do part A. Show all steps of your work clearly to ensure partial credit 1. (5 points) a. (2 points) Define the notions

Please just do part A.

Show all steps of your work clearly to ensure partial credit

1. (5 points) a. (2 points) Define the notions of policy rate and lending rate. b. (2 points) Why is the lending rate higher than the policy rate? c. (1 points) Is the spread between the policy rate and the lending constant over time? Provide historic evidence to support your

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