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ECO - Effects of a Contractionary Monetary Policy

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Question

Question;(a) Using a graphical analysis show the effects of a contractionary monetary policy on the equilibrium interest rate, investment and output. Make sure you clearly label all the curves in your graphs and the initial and final equilibria.(b) Using a graphical analysis show the effects of a contractionary fiscal policy on the equilibrium interest rate, investment and output. Make sure you clearly label all the curves in your graphs and the initial and final equilibria. Is there any crowding-out due to the contractionary fiscal policy?

 

Paper#55798 | Written in 18-Jul-2015

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