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Urgent please help. Thank you QUESTION 3 (20 MARKS) a. Explain how the central bank's response to inflation works its way through the economy to

Urgent please help. Thank you

QUESTION 3 (20 MARKS)

a. Explain how the central bank's response to inflation works its way through the economy to ultimately affecting real GDP and the price level. (10 marks)

b. When a customer takes cash from a drawer in his home and deposits it into his checking account, the composition of the money supply will change immediately and the size of the money supply may eventually change. Explain the process by which this action may change the money supply in economy. (10 marks)

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