Explain how following policy changes will affect the real interest rate and output in the IS-LM...

 

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Explain how following policy changes will affect the real interest rate and output in the IS-LM framework. Ensure that your answer include an approprtae diagram. i) An increase in the price level ii) An increase in nominal money supply iii) An increase in wealth iv) An increase in expected future income and output v) An increase in effective tax rate on capital Explain how following policy changes will affect the real interest rate and output in the IS-LM framework. Ensure that your answer include an approprtae diagram. i) An increase in the price level ii) An increase in nominal money supply iii) An increase in wealth iv) An increase in expected future income and output v) An increase in effective tax rate on capital

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In the ISLM framework the IS curve represents equilibrium in the goods market while the LM curve represents equilibrium in the money market Changes in ... View the full answer