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. A government builds more public housing, and construction firms invest more in machinery to speed up their housing construction.

\(b\). The young generation has to save more to buy apartments in the future.

c. Firms move their offices and factories to other countries as a civil war begins in their home country.

d. More tourists and local consumers visit new theme parks and increase their spending.

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Macroeconomics

ISBN: 9780137876037

11th Edition

Authors: Andrew B Abel

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