Macroeconomics (Fourth Edition)
4th Edition
ISBN: 9780393603767
Author: Charles I. Jones
Publisher: W. W. Norton & Company
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Chapter 11, Problem 6RQ
To determine
Explain the reason for considering the output, real interest rate relationship as the IS curve.
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Why is the relationship between output and the real interest rate called the IS curve?
What are the basic determinants of investment? Explain the relationship between the real interest rate and the level of investment. Why is investment spending unstable? How is it possible for investment spending to increase even in a period in which the real interest rate rises?
Is an increase in real interest rate always proportional to an increase in the growth rate of money supply (long run)?
Chapter 11 Solutions
Macroeconomics (Fourth Edition)
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