Question
You are an economist for the nation of Blueland, which is currently an unemployment rate of 5% and an inflation rate of 2%. The natural
You are an economist for the nation of Blueland, which is currently an unemployment rate of 5% and an inflation rate of 2%. The natural rate of unemployment in Blueland is 4%.
a) Draw a Loanable Funds Market showing the effect of part c on firms' borrowing. 4 pts.
b) Based on your answer to part a, what will happen to Blueland's Aggregate Demand? 1 pt. Explain. 1 pt.
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Principles of Economics
Authors: N. Gregory Mankiw
8th edition
1305585127, 978-1305971493, 978-1337516860, 1337516864, 978-0357539200, 978-1305585126
