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Draft a chart to describe the response of interest rates

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Reference no: EM132401172

Using the model of supply and demand curves in the market for money, explain the response of interest rates to the expansionary business cycle. (Given that other variables including money supply keep constant)

(1) Draft a chart to describe the response of interest rates to the expansionary business cycle (2%)

(2) Does demand curve for money shift to the left or the right? Why? (2% )

(3) Finally, will interest rates increase or decrease? Why?

Reference no: EM132401172

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