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Suppose the central bank pegs the price level by using money supply changes through open market operations. Present the IS-LM analysis incorporating this money supply rule and show the implications for the money supply, aggregate demand and output of an exogenous increase in autonomous consumption. Is the effect on interest rates less or greater under this money supply rule than if the money supply were held constant.

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M91571668

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