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WhydoesaCentralBanksexercisemonetarypolicy(MP)?ExplainhowtheReserveBankofAustralia (RBA)mightcarryoutmonetarypolicytoexpandthe economy.WhatwillbetheimpactoftheRBA's policyoninterestratesandaggregatedemand. Explain with the aid of the following diagrams: Figure 25 Money Market Equilibrium :15 14 i 12.- u 0 Interest rate

WhydoesaCentralBanksexercisemonetarypolicy(MP)?ExplainhowtheReserveBankofAustralia (RBA)mightcarryoutmonetarypolicytoexpandthe economy.WhatwillbetheimpactoftheRBA's policyoninterestratesandaggregatedemand.

Explain with the aid of the following diagrams:

Figure 25 Money Market Equilibrium :15 14 i 12.- u 0 Interest rate [per cm} o 5 1a 15 2|) 25 n is In 1.5 Quantity of mom (billions of dollars]

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