tutorial9questions - r 1 ˆ N 1 ˆ Y Figure 2 Question 2 :...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
EC2102 Macroeconomic Analysis I Tutorial 9, Week 13, April 11-15, 2011 Question 1 (This is a continuation of Question 2 of Tutorial 8) ( iii ) Explain the e/ects of an increase in money supply today on the economy, where the economy is currently as described in Figure 2. 1 N 1 Y 1 LM 1 IS 1 AD d N 1 1 ˆ P 1 1 1 ˆ ˆ P W w = 1 ˆ Y 1 AS 1 Y 1 P ( 29 1 1 ˆ r N S 1 w 1 r 1 ˆ
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: r 1 ˆ N 1 ˆ Y Figure 2 Question 2 : Suppose that total factor productivity today ( z 1 ) decreases in the sticky wage model. Determine the e/ects on today&s real output, real interest rate, consumption, investment, employment, the price level, and the real wage. 1...
View Full Document

Ask a homework question - tutors are online