urgent Suppose that the central government started more liberalized spending to stimulate the economy after lockdown; a) If the RBI does not respond to this event, what will happen to the price level? b) How does this event affect the demand/supply of money? Explain using a graph. c) If the RBI wants to keep the price level stable, what should it do? d) Graphically explain (Using AS and AD) the overall impact of this activity on the economy
urgent Suppose that the central government started more liberalized spending to stimulate the economy after lockdown; a) If the RBI does not respond to this event, what will happen to the price level? b) How does this event affect the demand/supply of money? Explain using a graph. c) If the RBI wants to keep the price level stable, what should it do? d) Graphically explain (Using AS and AD) the overall impact of this activity on the economy
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:urgent
Suppose that the central government
started more liberalized spending to
stimulate the
economy after lockdown;
a) If the RBI does not respond to this
event, what will happen to the price
level?
b) How does this event affect the
demand/supply of money? Explain using
a
graph.
c) If the RBI wants to keep the price level
stable, what should it do?
d) Graphically explain (Using AS and AD)
the overall impact of this activity
on the economy
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