Examine the effect of each of the following on output, the real interest rate, employment, and the

Question:

Examine the effect of each of the following on output, the real interest rate, employment, and the price level in the short run and the long run. Use the Keynesian IS-LM graph to explain your answer.

a. After a financial crisis, people lose confidence in the financial market and prefer to hold more cash.

b. People use Bitcoin rather than money since more shops now accept it for transactions and banks accept it for deposits.

c. A nuclear power accident destroys factories and pollutes agricultural products, driving up price levels.

d. A new holiday scheme raises the morale and productivity of workers.

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Macroeconomics

ISBN: 9780137876037

11th Edition

Authors: Andrew B Abel

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