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Suppose the central bank is using an interest rate as an intermediate target while real income is the ultimate policy target. There is a drop

Suppose the central bank is using an interest rate as an intermediate target while real income is the ultimate policy target. There is a drop in autonomous business investment that the central bank had not anticipated. Use the IS-LM model to show the effect of this shock. Would it have been better if the central bank had targeted money supply? Discuss.

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