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Planned aggregate expenditure in Lotusland depends on real GDP and the real interest rate according to the following equation PAE-3,000+0.8Y-2,000r. The Bank of Lotusland, the central bank, has announced that it ill set the real interest rate according to the policy reaction function found the first two columns of the table below For the rates of inflation given, find autonomous expenditure and short-run equilbrium output in Lotusland. Autonomous inflation rate, π 0.00 0.01 0.02 0.03 0.04 Real interest rate, c 0.02 0,03 0.04 0.05 .e6 expendi ture Equilibriun output
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