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Unformatted text preview: 1%? 10%? b. Which plan would you pick in each case? 3. Using the IS-LM model, graphically illustrate and explain what effect an increase in money growth will have on output, the nominal interest rate, and the real interest rate in the short run. ( 25 points ) 4. Using the IS-LM model, determine the impact of each of the following on stock prices. (If the effect is ambiguous, explain what additional information would be needed to reach a conclusion.) ( 30 points ) a) An unexpected expansionary monetary policy with no change in fiscal policy b) A fully expected expansionary monetary policy with no change in fiscal policy....
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This note was uploaded on 09/18/2008 for the course ECON 100B taught by Professor Rauch during the Winter '07 term at UCSD.
- Winter '07