For each of the following, describe how (if at all), the IS curve, MP curve, and AD
Question:
For each of the following, describe how (if at all), the IS curve, MP curve, and AD curves are affected.
a. A decrease in financial frictions.
b. An increase in taxes, and an autonomous easing of monetary policy.
c. An increase in the current inflation rate.
d. A decrease in autonomous consumption.
e. Firms become more optimistic about the future of the economy.
f. The new Bank of Canada governor begins to care more about fighting inflation.
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a The IS curve shifts to the right the MP curve does not shift the AD curve shifts to the right b Th...View the full answer
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Related Book For 
The Economics of Money Banking and Financial Markets
ISBN: 978-0321785701
5th Canadian edition
Authors: Frederic S. Mishkin, Apostolos Serletis
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