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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
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? Select one: a. The central bank is expected to lower interest rate to stimulate economic growth b. The central bank is expected to lower interest rate to increase inflation c. The central bank is expected to increase interest rate to stimulate economic growth d. The central bank is expected to increase interest rate to reduce inflation Clear my choice
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