Describe how, if at all, the following developments affects the real interest rate and output in the short run (or whether it is not possible to tell). Assume that the central bank is following an interest rate rule.
Describe how, if at all, the following developments affects the real
interest rate and output in the short run (or whether it is not possible to tell). Assume that the central bank is following an interest rate rule.
-The government increases taxes and government purchases by equal amounts.
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