Question
Consider the AS - AD model where the RBA conducts monetary policy using the interest rate rule with a price level target. Which of the
Consider the ASAD model where the RBA conducts monetary policy using the interest rate rule with a price level target. Which of the followings are not true, all else equal?
Note: Choose all the correct answers
An increase in the markup m would cause the interest rate to rise in the medium run.
An expansionary fiscal policy would cause the interest rate to increase in the short run.
An expansionary monetary policy would cause the interest rate to be lower in the medium run.
An increase in minimum wage would increase the level of employment in the medium run.
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