Question: Q. 4: Explain how each of the following developments would affect the supply of money, the demand for money, and the interest rate. For each

Q. 4: Explain how each of the following developments would affect the supply of money, the demand for money, and the interest rate. For each case, show what happens in a closed economy and in a small open economy with exible exchange rate. Illustrate your answers with diagrams. a. A wave of optimism boosts business investment and expands aggregate demand. b. An increase in oil prices shifts the short-run aggregate-supply curve to the left

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