
Macroeconomics 5th Edition by Olivier Blanchard
Edition 5ISBN: 978-0132159869
Macroeconomics 5th Edition by Olivier Blanchard
Edition 5ISBN: 978-0132159869 Exercise 3
For each of the changes in expectations in (a) through (d), determine whether there is a shift in the IS curve, the LM curve, both curves, or neither. In each case, assume that expected current and future inflation are equal to zero and that no other exogenous variable is changing.
a. a decrease in the expected future real interest rate.
b. an increase in the current money supply.
c. an increase in expected future taxes.
d. a decrease in expected future income.
a. a decrease in the expected future real interest rate.
b. an increase in the current money supply.
c. an increase in expected future taxes.
d. a decrease in expected future income.
Explanation
(a) A decrease in expected future intere...
Macroeconomics 5th Edition by Olivier Blanchard
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