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Suppose the central bank's monetary policy sets the interest rate according to the function: i = 4 + 2( - * ) with * =
Suppose the central bank's monetary policy sets the interest rate according to the function:
i = 4 + 2( - *) with *= 3,
and aggregate expenditure is:
AE = 84 + 0.4Y - 6i
a)What is the equation for the AD curve? Use 'PI' to represent when entering your equation.
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