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Macroeconomics 5th Edition by Olivier Blanchard
Edition 5ISBN: 978-0132159869Macroeconomics 5th Edition by Olivier Blanchard
Edition 5ISBN: 978-0132159869 Exercise 5
The neutrality of money
a. In what sense is money neutral How is monetary policy useful if money is neutral
b. Fiscal policy, like monetary policy, cannot change the natural level of output. Why then is monetary policy considered neutral but fiscal policy is not
c. Discuss the statement "Because neither fiscal nor monetary policy can affect the natural level of output, it follows that, in the medium run, the natural level of output is independent of all government policies."
a. In what sense is money neutral How is monetary policy useful if money is neutral
b. Fiscal policy, like monetary policy, cannot change the natural level of output. Why then is monetary policy considered neutral but fiscal policy is not
c. Discuss the statement "Because neither fiscal nor monetary policy can affect the natural level of output, it follows that, in the medium run, the natural level of output is independent of all government policies."
Explanation
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Although monetary policy is ineffective ...
Macroeconomics 5th Edition by Olivier Blanchard
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