6. Monetary market. Describe the effects of an increase in output in the mon- etary market...
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6. Monetary market. Describe the effects of an increase in output in the mon- etary market (focus in the partial equilibrium effects, that is, you don't have to consider the other markets). Do it for the Real Business Cycle model and then for the Keynesian model. Remember that in the RBC model Monetary Policy is an exogenous decision made by the FED and prices are flexible, whereas in the NK model is an endogenous adjustment to eliminate any excess demand of money and prices are sticky. 6. Monetary market. Describe the effects of an increase in output in the mon- etary market (focus in the partial equilibrium effects, that is, you don't have to consider the other markets). Do it for the Real Business Cycle model and then for the Keynesian model. Remember that in the RBC model Monetary Policy is an exogenous decision made by the FED and prices are flexible, whereas in the NK model is an endogenous adjustment to eliminate any excess demand of money and prices are sticky.
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