Question
Describe how an increase in government expenditure would affect the IS-PC-MR (single lag version) model. Be sure to graph the initial state of the model,
- Describe how an increase in government expenditure would affect the IS-PC-MR (single lag version) model.
Be sure to graph the initial state of the model, show the shock to the economy, and show the dynamics of the model. Assume the increase can be modeled as a permanent demand shock.
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Contemporary Labor Economics
Authors: Campbell R. McConnell, Stanley L. Brue, David Macpherson
11th Edition
1259290602, 1259290603, 978-1259290602
