Question
In the short run when prices are constant, describe how are the equilibrium levels of real output (Y) and nominal exchange rate (E) determined simultaneously
In the short run when prices are constant, describe how are the equilibrium levels of real output (Y) and nominal exchange rate (E) determined simultaneously by the interaction of DD and AA curves. In your answer describe clearly how goods market equilibrium condition (DD) and money market equilibrium condition (AA) are derived. How is J curve related or contradicted with the explanation you have above?
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Economics of Money, Banking and Financial Markets
Authors: Frederic S. Mishkin
9th Edition
978-0321607751, 9780321599797, 321607759, 0321599799, 978-0321598905
