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1. When the supply of loanable funds shifts its position to the left, interest rates will ________ because loanable funds will be ________.
a. rise; less scarce
b. fall; less scarce
c. rise; more scare
2. If a Central Bank decides it needs to decrease both the aggregate demand and the money supply, then it will:
a. follow loose monetary policy.
b. follow contractionary monetary policy.
c. follow expansionary monetary policy.
3.When considering which monetary policy to implement, the Central Bank needs to also be conscious of the tradeoff between
a. unemployment and inflation.
b. consumption and investment.
c. private investments and government expenditures.
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