Why does the Bank increase the overnight rate when the economy experiences inflation?
The higher overnight rate results in

Question

Why does the Bank increase the overnight rate when the economy experiences inflation? 
 The higher overnight rate results in

Answer

an increase in real GDP, but a fall in the price level.

Answer

an increase in real GDP, with no change in the price level.

Answer

a fall in the price level and a decrease in real GDP.

Answer

an increase in both real GDP and the price level.

Answer

a rise in the price level, but no change in real GDP.

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