Question
a. Show graphically the relationship between the MP Curve, the IS Curve, and the Aggregate Demand Curve. Explain briefly this relationship. b. Suppose the monetary
a. Show graphically the relationship between the MP Curve, the IS Curve, and the
Aggregate Demand Curve. Explain briefly this relationship.
b. Suppose the monetary policy curve is given by r= 1.5 + .75(pi) and the IS curve
by Y=13-r.Solve for aggregate demand.
c. How do nominal interest rate create excess supply and excess demand in the
Money Market model? Explain and show graphically.
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Mostly Harmless Econometrics An Empiricist's Companion
Authors: Joshua Angrist
1st Edition
1400829828, 9781400829828
