Consider the classical IS/LM model without misperceptions. A) On a graph, show how output, the price level, and the real
Posted: Fri Jul 01, 2022 8:14 am
Consider the classical IS/LM model without misperceptions.
A) On a graph, show how output, the price level, and the realinterest rate will respond in the short-run and long-run to anincrease in government purchases. (10pts)
B) Explain why classicals are typically opposed to the use offiscal policy during the business cycle. (5pts)
A) On a graph, show how output, the price level, and the realinterest rate will respond in the short-run and long-run to anincrease in government purchases. (10pts)
B) Explain why classicals are typically opposed to the use offiscal policy during the business cycle. (5pts)