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Monetary policy to promote real gdp growth

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Question:  Suppose the Fed decides to use monetary policy to promote real GDP growth. Assume the Fed believes that the long term level of real GDP is too low and will do what it can to continually push real GDP above that level (both in the short run and the long run). Using the AD/AS model, discuss the success that such a policy might have. What can you say about money neutrality?

Reference no: EM131432007

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