Aggregate expenditure and aggregate demand

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The economy is at less than full employment. The current rate of interest is very low and the public is willing to hold all additional money that might be created by the central bank. An expansionary monetary policy is implemented in an attempt to eliminate the GDP Gap. What would the diagram of the money market, investment, aggregate expenditure and aggregate demand look like in this case? What is the effectiveness of an expansionary monetary policy in these circumstances?

Reference no: EM132550314

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