Question
Using the AEM, describe the likely effects on Australian aggregate output in the short run in each of the following circumstances. Provide brief explanations. (2
Using the AEM, describe the likely effects on Australian aggregate output in the short run in each of the following circumstances. Provide brief explanations. (2 points each)
a) There is deep recession in Europe.
b) (Australian) housing values rise above their trend.
c) Mortgage lenders (in Australia) raise interest rates.
d) The (Australian) government decides to close 20 percent of its military bases around the country.
e) The long-run interest rate rises.
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The Economics of Money Banking and Financial Markets
Authors: Frederic S. Mishkin
11th edition
133836797, 978-0133836790
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