In a closed (no foreign sector), mixed economy with stable prices, if we assume that consumption (C)

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In a closed (no foreign sector), mixed economy with stable prices, if we assume that consumption (C) and investment (I)spending do not depend on the interest rate (r), can we conclude that

a. The interest-related expenditure (IRE) function is vertical?

b. Monetary policy has no effect on real income and output? Explain your answers.

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Economics for Managers

ISBN: 978-0132773706

3rd edition

Authors: Paul G. Farnham

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Question Posted: Dec 15, 2015 06:44 AM

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In a closed (no foreign sector), mixed economy with stable prices, if we assume that consumption (C)

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