Macroeconomics
Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
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Chapter 10, Problem 1AP

a)

To determine

The effect of increase in the expected future MPK, using the IS-LM model on the following:

  1. Current output
  2. The real interest rate
  3. Consumption
  4. investment
  5. the price level

b)

To determine

The effect of increase in the expected future MPK, using the AD-AS model on the following:

  1. Current output
  2. The real interest rate

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