Suppose the economy is in long-run equilibrium, but the central bank decides to increase bank rate (the rate at which the central bank lends to banks). How does this affect the economy in the short run if the monetary policy is not fully anticipated? What are the effects in the short run if the policy is anticipated? Enter your results in the following table.   Short-Run Effects If Unanticipated Short-Run Effects If Anticipated Aggregate Demand     increase/no change/decrease     increase/no change/decrease Short-Run Aggregate Supply     increase/no change/decrease     increase/no change/decrease Price Level increase/no change/decrease         increase/no change/decrease Output Level     increase/no change/decrease     increase/no change/decrease Real Interest Rate increase/no change/decrease         increase/no change/decrease

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Suppose the economy is in long-run equilibrium, but the central bank decides to increase bank rate (the rate at which the central bank lends to banks). How does this affect the economy in the short run if the monetary policy is not fully anticipated? What are the effects in the short run if the policy is anticipated? Enter your results in the following table.
 
Short-Run Effects If Unanticipated
Short-Run Effects If Anticipated
Aggregate Demand     increase/no change/decrease     increase/no change/decrease
Short-Run Aggregate Supply     increase/no change/decrease     increase/no change/decrease
Price Level increase/no change/decrease         increase/no change/decrease
Output Level     increase/no change/decrease     increase/no change/decrease
Real Interest Rate increase/no change/decrease         increase/no change/decrease
 
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