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Author Question: Discuss the various components of wealth. What will be an ideal ... (Read 113 times)

nmorano1

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on: Jun 30, 2018
Discuss the various components of wealth.
 
  What will be an ideal response?

Question 2

When the central bank pursues contractionary monetary policy, we that this policy will result in an increase in the interest rate, a reduction in investment, a reduction in demand, and a lower level of equilibrium output. Explain what happens to the position of the IS curve as the central bank pursues contractionary monetary policy.
 
  What will be an ideal response?


djpooyouma

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Reply #1 on: Jun 30, 2018
Answer to Question 1

Housing, financial, and human wealth.

Answer to Question 2

Changes in the interest rate do cause changes in investment, demand, and output. However, they do not cause shifts of the IS curve. Changes in the interest rate cause movements along the IS curve.


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