11-03-08-Diagrammatic Representation Of Complet Model

11-03-08-Diagrammatic Representation Of Complet Model -...

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Unformatted text preview: Diagrammatic Representation Of The Complete Model March 8, 2011 The Diagram, An Example, And The General Principles These Slides Present The Complete Model I n A Diagrammatic Form. I t Does This I n The Context Of A Policy Shock. Namely, A Decrease in Demand For Money, Policy VI c. This Provides An Example Of The General Principles Which Guide How This Diagram Operates. Equilibrium I n The Goods Market We Have Been Dealing All Along With Equilibrium I n The (Domestic) Goods Market. This Has Been The Focus Of Our Discussion Of The Open-Economy Model So Far. The Diagram I n The Next Slide Should Be Very Familiar. p CA STI G STI G CA e=.4 1 Equilibrium In The (Domestic) Goods Market p CA STI G 1 LM ms=5,md0=3.15 Equilibrium In The (Domestic) Money Market p CA STI G STI G CA e=.4 1 LM ms=5,md0=3.15 Equilibrium In All Markets p CA STI G 1 Excess Demand For Domestic Goods Excess Supply Of Domestic Goods Excess Supply Of Money Excess Demand For Money Equilibrium Occurs In All Markets When p = 1....
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This note was uploaded on 07/16/2011 for the course ECON 2154 taught by Professor Boyer during the Winter '10 term at UWO.

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11-03-08-Diagrammatic Representation Of Complet Model -...

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