Suppose that a closed economy that had been affected by the Covid-19 pandemic and its state...

 

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Suppose that a closed economy that had been affected by the Covid-19 pandemic and its state was given as follows: * a). Indicate in the above graph which line is the IS curve and which one is the LM curve. Which one is FE line? b). Use the above graph to analyze the impacts of an expansionary monetary policy on the national income and the interest rate in the short-run. c). Use the AD-AS graph to analyze the impact of your policy in the long run and the short-run on the price level. Pay attention to the consistency of your analysis in AD-AS and IS-LM. Suppose that a closed economy that had been affected by the Covid-19 pandemic and its state was given as follows: * a). Indicate in the above graph which line is the IS curve and which one is the LM curve. Which one is FE line? b). Use the above graph to analyze the impacts of an expansionary monetary policy on the national income and the interest rate in the short-run. c). Use the AD-AS graph to analyze the impact of your policy in the long run and the short-run on the price level. Pay attention to the consistency of your analysis in AD-AS and IS-LM.

Answer rating: 100% (QA)

Solution a Negatively sloped curve is IS curve positively sloped curve is LM curve and vertical stra... View the full answer