ECON-Quiz-5 - MACROECONOMICS QUIZ#5 1 John Mai ECON...

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John Mai 11/30/16 ECON 2301.003 MACROECONOMICS QUIZ #5 1. Describe the chain of events that are likely to unfold when the government reduces net taxes. Explain your answer in terms of its impact on aggregate output, the demand for money, the interest rate and planned investment
2. Using the short-hand symbols Ms, r, I, Y, and Md to demonstrate the effects of an expansionary monetary policy.
3. Explain how aggregate quantity-demanded falls when the price level increases and the impact this has on interest rates and aggregate output.
4. Discuss how the consumption link provides another explanation for the downward-sloping aggregate demand curve.

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