Macroeconomics (Fourth Edition)
4th Edition
ISBN: 9780393603767
Author: Charles I. Jones
Publisher: W. W. Norton & Company
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Question
Chapter 15, Problem 7E
(a)
To determine
Impact of increase in financial frictions in the AS‑AD framework.
(b)
To determine
The impact of increase in financial friction on the impulse response function of GDP.
(c)
To determine
The impact of increase in financial friction on impulse response function of inflation.
(d)
To determine
Comparing the impulse response function of GDP and inflation to the Smets‑Wouters model.
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Relating DSGE and AS/AD for a shock to government purchases: Consider thecomplete dynamic response of the economy to a temporary rise in governmentpurchases in the AS/AD framework.(a) Draw the AS/AD graph associated with this shock.
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Chapter 15 Solutions
Macroeconomics (Fourth Edition)
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