4. Explain why each of the following statements is true. Discuss the impact of monetary and fiscal...

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4. Explain why each of the following statements is true. Discuss the impact of monetary and fiscal policy in each of these special cases.

a. If investment does not depend on the interest rate, the IS curve is vertical.

b. If money demand does not depend on the interest rate, the LM curve is vertical.

c. If money demand does not depend on income, the LM curve is horizontal.

d. If money demand is extremely sensitive to the interest rate, the LM curve is horizontal.

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Macroeconomics

ISBN: 9781429218870

7th Edition

Authors: N. Gregory Mankiw

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Question Posted: Sep 27, 2024 09:00 AM

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4. Explain why each of the following statements is true. Discuss the impact of monetary and fiscal...

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Macroeconomics

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