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Business, 09.09.2020 23:01 bobelliot67789

Determine the likely effects of the following hypothetical news items on output, the real interest rate, inflation, stock prices, and bond prices (up/down/unchanged/ambiguous). Explain briefly. a. Congress and the President agree on a major tax cut. The Fed keeps the real interest rate stable. b. Housing starts are unexpectedly low, indicating a decrease in housing investment. The Fed is worried about a recession and will do whatever it can to prevent a reduction in output.

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