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Question: Memorandum
You are employed by HST Products, a large manufacturing company. You work as an assistant to the General Manager, Mr Julius Muzenda. Mr Muzenda is Chairman of the company's Operations and Development Committee and the next meeting will take place on Wednesday next week. You have told the members of the committee that the meeting will be in the usual place, Committee Room 4, at the usual time, 1000. A buffet lunch has been arranged for 1230 after the meeting ends.
Today, Mr Muzenda says this to you: "Could you please send a memo to all members of the Operation and Developments Committee? The Managing Director, Maria Perez, wants to join us but she can only come in the afternoon. So I've made the arrangements for the meeting to start at one o'clock instead of 10. There will still be lunch provided at 12.30 before the meeting starts. Mrs Perez wants to talk about the new Development Plan so it's very important that everyone attends the meeting. You can apologies for the short notice but please stress that everyone should be there. Oh yes, we will be in a different room - Committee Room 1.
Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest. How much control does the Fed have over this longer real rate?
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