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Suppose a central bank identifies an increase in lending to the floral industry. In particular, many small businesses are borrowing aggressively to import tulips. As
Suppose a central bank identifies an increase in lending to the floral industry. In particular, many small businesses are borrowing aggressively to import tulips. As market participants observe a sharp increase in the price of tulips, the central bank considers its actions. What do you think the central bank should do to bust the possible bubble in order to prevent the worst impacts on economy? Use IS-LM model to support your arguments
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