5. (Appendix 9.B) Recall from Chapter 7 that an increase in @, the nominal interest rate on...

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5. (Appendix 9.B) Recall from Chapter 7 that an increase in @, the nominal interest rate on money, increases the demand for money. To capture that effect, let's replace Eq. (9.B.17) with io + GY Ge + = 2". How does this modification change the solutions for the general equilibrium values of the variables discussed in Appendix 9.B, including employment, the real wage, output, the real interest rate, and the price level?

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Macroeconomics Plus Myeconlab With Pearson Global Edition

ISBN: 377221

9th Canadian Edition

Authors: Andrew B. Abel ,Ben Bernanke ,Dean Croushore

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