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Question 5 (20 points) In the monetary intertemporal model, suppose that the money supply is fixed for all time, and that there is a decrease
Question 5 (20 points) In the monetary intertemporal model, suppose that the money supply is fixed for all time, and that there is a decrease in the capital stock, brought about by a war or natural disaster. Assume that any that for any function of two or more variables, the effect of an ambiguous change in one variable is outweighed by the effect of an unambiguous change in any other variable. Determine the effect on the macroeconomic variables. Explain using diagrams
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