(c) [8 marks] Due to the "credit crunch" of the 2008-2010 financial crisis many economies have experienced periods in wh

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(c) [8 marks] Due to the "credit crunch" of the 2008-2010 financial crisis many economies have experienced periods in wh

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C 8 Marks Due To The Credit Crunch Of The 2008 2010 Financial Crisis Many Economies Have Experienced Periods In Wh 1
C 8 Marks Due To The Credit Crunch Of The 2008 2010 Financial Crisis Many Economies Have Experienced Periods In Wh 1 (24.56 KiB) Viewed 10 times
(c) [8 marks] Due to the "credit crunch" of the 2008-2010 financial crisis many economies have experienced periods in which the nominal interest rate was almost zero. Using a diagram to illustrate your answer explain how such a situation can be interpreted using the IS-LM model. Comment on the effectiveness of monetary and fiscal policy in such a case. Would your answer be different if the central bank had used a Taylor Rule in conducting monetary policy? Explain.
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