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Solve clearly Question 1 Not yet answered Marked out of 6.00 Flag question In Country A, the central bank sets overnight interest rates according to

Solve clearly

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Question 1 Not yet answered Marked out of 6.00 Flag question In Country A, the central bank sets overnight interest rates according to the following policy rule: r = 0.2xY + 1.34p In Country B. the central bank sets overnight interest rates according to the following policy ruler = 0.5*Y . 0.6* Above, r is the overnight interest rate that the central bank charges commercial banks when they borrow from the central bank. Y is the output level, and P is the price level. (a) In which country, the central bank "fights with inflation" more aggressively? Why? Explain your answer. (b) In the AS-AD diagram, which country's AD curve will be flatter? Why? Explain your answer. Note: You get credit for your explanation, If your explanation is not good, you will get no credit

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