Considering the expectation into the model

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Reference no: EM131160629

Derive the IS-LM model by considering the expectation into the model. You need to explain which factors affect each of the curve, and how the changes of these factors will shift the corresponding curve of the model.

Suppose there is a expansionary monetary policy, with the assump- tions that it will not change expectations of either the future interest rate or future output, how will this affect the equilibrium of IS-LM model?

Reference no: EM131160629

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