Question
Consider the economy of Zion. Assume that the economy is at its long-run equilibrium when there is a sudden tightening of monetary policy. Using IS-MP,
Consider the economy of Zion. Assume that the economy is at its long-run equilibrium when there is a sudden tightening of monetary policy. Using IS-MP, AD-IA answer compare the following variables to their initial long-run equilibrium.
Answer using terminogly as follows: No change, Increase, Decrease
What happens to short-run real GDP?
What happens to short run real interest rates?
What happens to short run inflation?
What happens to long-run real interest rates?
What happens to long-run inflation?
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Latin America's Economy Diversity, Trends, And Conflicts
Authors: Eliana Cardoso, Ann Helwege
1st Edition
0262531259, 9780262531252
