Macroeconomics (Fourth Edition)
Macroeconomics (Fourth Edition)
4th Edition
ISBN: 9780393603767
Author: Charles I. Jones
Publisher: W. W. Norton & Company
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Chapter 11, Problem 4RQ
To determine

The equation of the IS curve.

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Carefully examine and discuss the major differences of the Mundell Fleming Model in the short run as opposed to in the long run. Thereafter, analyse the impact of these differences on the Model.  (provide graphical illustrations where needed)
Consider the following macroeconomic model: Y = C + Io + Go C = a + b(Y-T) T = d+tY Where the endogenous variables are Y, C and T, while the exogenous variables are G₁ and I. The parameters are such that a > 0,d>0,0
Suppose​ England's economy is in​ long-run equilibrium. As a result of the​ coronavirus, the British government orders all​ non-essential businesses to close and issue​ “shutter in” and other​ “stay at​ home” directives requiring its citizens and residents not to leave their residences absent emergencies​ and/or to purchase food and groceries from markets​ (that is, people​ cannot, for​ example, go to​ restaurants, movies or sporting events and the​ like.) If​ so, then we would predict that in the​ short-run England's   A. real GDP will fall and the price level might​ rise, fall, or stay the same.   B. real GDP will rise and the price level might​ rise, fall, or stay the same.   C. the price level will​ rise, and real GDP might​ rise, fall, or stay the same.   D. the price level will​ fall, and real GDP might​ rise, fall, or stay the same
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