Question: If prices are sticky, then a one-time permanent decrease in nominal money supply leads to (a) an increase in the short-run equilibrium interest rate. (b)
If prices are sticky, then a one-time permanent decrease in nominal money supply leads to (a) an increase in the short-run equilibrium interest rate. (b) a decrease in the short-run equilibrium interest rate. (c) no change in the short-run equilibrium interest rate. (d) an increase in the long-run equilibrium interest rate and no effect in the short run. (e) a decrease in the long-run equilibrium interest rate and no effect in the short run
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
