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Fiscal policy cannot affect output in the long run

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Reference no: EM13315758

1. "In the Solow model, an economy that starts with a higher stock of capital per capita will reach a higher steady state level of capital per capita"

2. " In the money market, a decrease in real income will tend to decrease the equilibrium interest rate (abstracting from the goods market)"

3. "If prices adjust inmediately, then monetary policy will have no effect whatsover"

4. "Fiscal policy cannot affect output in the long run" 

Reference no: EM13315758

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