Ch5.5 Numerial Example of Monetary Expansion

Ch5.5 Numerial Example of Monetary Expansion - Find the LM...

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Numerical Example of Expansionary Monetary Policy A. Goods Market Production=Demand: Y=C+I+G=200+0.25*(Y-200)+150+0.25Y-1000i+250 Find the IS relation. B. Financial Markets Real money supply=real money demand: M/P=1600=2Y-8000i
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Unformatted text preview: Find the LM relation. C. What are the equilibrium values of interest rate and output? D. Now suppose the real money supply (M/P) increases to 1840. What are the new equilibrium values of interest rate and output?...
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This note was uploaded on 02/19/2011 for the course ECON 1021 taught by Professor Kokwanwai during the Fall '08 term at CUHK.

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