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The Central of Banana republic is planning to choose a monetary policy framework between monetary aggregate and interest rate targeting. Which of these monetary policy

The Central of Banana republic is planning to choose a monetary policy framework between monetary aggregate and interest rate targeting. Which of these monetary policy frameworks better helps to stabilize output? Under the following circumstances: A. Majority of shocks come from the goods/commodity market. (10 Marks) B. Majority of shocks come from the money market. (10 Marks) Page 8 of 9 Explain your answer using clearly labelled diagrams.

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