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As a manager of a firm, you are concerned about a potential increase in interest rates, which would reduce the demand for your firm's products. Bank Negara is scheduled to meet in one week to assess the economic conditions and set monetary policy. Economic growth has been high, but inflation has also increased from 3 percent to 5 percent (annualized) over the last four months. The level of unemployment is so low so that it cannot possibly go much lower.

Given the situation, is the Central Bank likely to adjust monetary policy? If so, how?

Reference no: EM132731403

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