Essay
According to the Keynesian IS-LM model,what is the effect of each of the following on output,the real interest rate,employment,and the price level? Distinguish between the short run and the long run.
(a)Expected inflation decreases.
(b)Labor supply increases due to a change in demographics.
(c)The future marginal product of capital increases.
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(a)Short run: Y and N decrease; r rises;...View Answer
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