With the following problems, we begin to integrate the 3-sector model. These problems follow from Martinsen, chapter 18 and review many of the concepts from previous chapters. For each economic condition, insert a new supply and/or demand curves. Below the graph, state the change in endogenous variables: increase, decrease, or unchanged. Carefully note the market(s) analyzed in each problem. 10 The central bank lowers the interest rate engaging in expansionary monetary policy. Show the change in each market beginning with the Real Credit Market. Cost of Real Credit S AS AD D RGDP RC Answer for r, RC, P, and RGDP: 11 The federal government engages in expansionary fiscal policy. Show the effect in each sector beginning with the Credit Market. Cost of Real Credit P S AS AD D RGDP RC Answer for r, RC, P, and RGDP: |