Unformatted text preview: 1%? 10%? b. Which plan would you pick in each case? 3. Using the ISLM 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 ISLM 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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 Winter '07
 RAUCH
 Microeconomics, Fiscal Policy, Monetary Policy, Interest, expansionary monetary policy, Professor Dong Heon Kim

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