1. Graphically show how expansionary monetary policy can be used to eliminate a recessionary gap. 2. Graphically...
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2. Graphically show how contractionary monetary policy can be used to eliminate an inflationary gap.
3. Explain why Keynesians are more likely to advocate expansionary monetary policy than contractionary monetary policy.
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1 The above figure shows an economy in a recessionary gap at point A An increase in the money supply ...View the full answer
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