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Economy showing equilibrium output and price level

Assignment Help Macroeconomics
Reference no: EM132550854

The United States economy is currently operating above the full employment level of GDP.

  1. Draw a correctly labeled AD/AS graph for this economy showing equilibrium output and price level.

Identify an open market operation that the Federal Reserve could enact that will solve the problem.

Show and Explain how the policy you identified in (B) will affect each of the following in the short-run.

  1. output and employment
  2. price level
  3. nominal interest rates

If the interest rates you identified in (C) continued, explain what will happen to the following:

  1. U.S. financial assets
  2. International value of the dollar

Reference no: EM132550854

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