Suppose the monetary policy curve is given by r = 1.5 + 0.75, and the IS curve

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Suppose the monetary policy curve is given by r = 1.5 + 0.75π, and the IS curve is given by Y = 13 − r.

a. Calculate an expression for the aggregate demand curve.

b. Calculate the real interest rate and aggregate output when the inflation rate is 2%, 3%, and 4%.

c. Draw graphs of the IS, MP, and AD curves, labelling the points from part

(b) on the appropriate graphs.

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The Economics Of Money, Banking And Financial Markets, Seventh Canadian

ISBN: 9780226531922

7th Canadian Edition

Authors: Frederic S. Mishkin

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Question Posted: Nov 18, 2024 01:00 AM

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Suppose the monetary policy curve is given by r = 1.5 + 0.75, and the IS curve

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The Economics Of Money, Banking And Financial Markets, Seventh Canadian

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