Solved

Take a Look at the IS-MP-PC Model Shown Here

Question 65

Multiple Choice

Take a look at the IS-MP-PC model shown here. If a spending shock causes the IS curve to shift right until the output gap is 0%, what will the new equilibrium real interest rate be?
Take a look at the IS-MP-PC model shown here. If a spending shock causes the IS curve to shift right until the output gap is 0%, what will the new equilibrium real interest rate be? A) 5%. B) 3%. C) -4%. D) 0%.


A) 5%.
B) 3%.
C) -4%.
D) 0%.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q60: Which of the following graphs correctly represents

Q61: Graphically depict how spending shocks affect the

Q62: The economy shown here begins at a

Q63: Tariffs on inputs lead to a _

Q64: The 1973 OPEC oil embargo is an

Q66: If the Canadian dollar depreciates, which of

Q67: The Fed model combines the _ curve,

Q68: You are an economic adviser using the

Q69: In the IS-MP analysis in the Fed

Q70: If the government lowers corporate taxes, which