suppose the economy is at its long-run equilibrium when there is a sudden tightening of monetary policy. Using IS-MP, AD-IA answer compare the following variables to their initial long-run equilibrium. What happens to long-run real interest rates and long-run inflation. Do they go up-down, stay the same? and please explain why??
suppose the economy is at its long-run equilibrium when there is a sudden tightening of monetary policy. Using IS-MP, AD-IA answer compare the following variables to their initial long-run equilibrium. What happens to long-run real interest rates and long-run inflation. Do they go up-down, stay the same? and please explain why??
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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suppose the economy is at its long-run equilibrium when there is a sudden tightening of
compare the following variables to their initial long-run equilibrium.
What happens to long-run real interest rates and long-run inflation. Do they go up-down, stay the same? and please explain why??
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