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Author Question: Refer to Figure 15-11. In the dynamic model ofAD-ASin the figure above, if the economy ... (Read 25 times)

ENagel

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Question 1

Use the dynamic aggregate demand and aggregate supply model and start with Year 1 in long-run macroeconomic equilibrium. For Year 2, graph aggregate demand, long-run aggregate supply, and short-run aggregate supply such that the condition of the economy will induce the Federal Reserve to conduct a contractionary monetary policy. Briefly explain the condition of the economy and what the Federal Reserve is attempting to do.



Question 2

Figure 15-11











Refer to Figure 15-11.  In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, the Federal Reserve would most likely


◦ increase interest rates.
◦ decrease interest rates.
◦ not change interest rates.
◦ decrease the inflation rate.


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Marked as best answer by ENagel on Mar 16, 2019

dajones82

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ENagel

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Reply 2 on: Mar 16, 2019
Wow, this really help


Zebsrer

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Reply 3 on: Yesterday
Great answer, keep it coming :)

 

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