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Q.1 If Central bank follows a fixed interest rate policy then it has no independent monetary policy. True/false? Explain your answer. Q.2 Trace out the

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Q.1 If Central bank follows a fixed interest rate policy then it has no independent monetary policy. True/false? Explain your answer. Q.2 Trace out the effect of increase in government expenditure on equilibrium output and the interest rate when government finance its expenditure through (a) Open market operation, (6) Increase in tax rate

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