HW3 (extra) Solution - Accelerated Macro Spring 2015...

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Accelerated Macro Spring 2015Solutions to HW #31IS-LM MicrofoundationsExplain why each of the following statements is either true or false. If true, discuss the short-run impactof monetary versus fiscal policy in these special cases.Solution: All four statements are true.a. If investment does not depend on the interest rate, theIScurve is vertical.
b. If money demand does not depend on the interest rate, theLMcurve is vertical.

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