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Ethical Deli is a small deli that specializes in ethically produced meats and cheeses. Customers enter the shop, wait in line at the deli counter (if necessary), order from the deli counter, wait in line at the cashier (if necessary), pay for their items, and then leave. On average, customers require 1 minute to be served at the deli counter, and 45 seconds to pay for their items. The average customer spends 3 minutes waiting at the deli counter and 2 minutes waiting for the cashier.
Ethical Deli faces a steady arrival rate of 40 customers per hour. For the sake of this question, you can assume that no time is spent in the deli other than the four activities outlined above.
Question (a) On average, how many customers are in Ethical Deli at any point in time?
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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