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Rise in Australian Interest Rate Suppose that, all else constant, the Reserve Bank of Australia decides to raise its target interest rate. Which components of

Rise in Australian Interest Rate

Suppose that, all else constant, the Reserve Bank of Australia decides to raise its target interest rate. Which components of planned aggregate expenditures does this affect and why? Illustrate how this affects the equilibrium level of (demand determined) output according to the Keynesian Cross diagram.

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