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Consider 2 closed economies identical with the exception that they have different investment functions. Economy A: I=150 0.1Y Economy B: I=150 0.1Y-0.1r a) Draw IS
Consider 2 closed economies identical with the exception that they have different investment functions. Economy A: I=150 0.1Y Economy B: I=150 0.1Y-0.1r a) Draw IS curves for Economy A and B. (16 points) b) What are the short-run effects of an autonomous monetary easing in these two countries? (14 points)
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