Retrieving "Interest Rate Effect" from the archives
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Aggregate Demand
Linked via "Interest Rate Effect"
| Fiscal Policy | Reduction in income tax rates | Shifts Right |
Central Banks utilize monetary policy tools, such as the Benchmark Rate Adjustment(BRA), to directly target the Interest Rate Effect(Keynes Effect), thereby aiming to shift the $\text{AD}$ curve to achieve desired inflation and output targets $\text{[5]}$.
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