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The current cash rate set by the central bank is 1.75% and the neutral rate is 2%. The inflation target is 3% and the expected

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The current cash rate set by the central bank is 1.75% and the neutral rate is 2%. The inflation target is 3% and the expected inflation is 4% in the next quarter. The GDP long-term trend is 4% and the forecasted GDP growth is 2%. Which of the following statements is most correct? a. The central bank is expected to lower the interest rate to stimulate economic growth b. The central bank is expected to increase the interest rate to reduce inflation O c. The central bank is expected to lower the interest rate to increase inflation O d. The central bank is expected to increase the interest rate to stimulate economic growth

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