Question
Use the IS-LM curves to analyse the effects of 1) A stock market boom making everyone richer 2) Consumers moving to use cash more after
Use the IS-LM curves to analyse the effects of
1) A stock market boom making everyone richer
2) Consumers moving to use cash more after a series of credit card frauds.
For each shock
a) Use the IS-LM diagram to show the effects of the shock on Y and r.
b) What happens to C, I , and the unemployment rate?
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Macroeconomics Principles Applications and Tools
Authors: Arthur O'Sullivan, Steven Sheffrin, Stephen Perez
9th edition
978-0134089027, 134089022, 978-0134420684
