Suppose the feder reserve adopts a tight money policy

Reference no: EM13692323

A. Suppose the feder reserve adopts a tight money policy to slow the economy down because of its concern about potentially rising inflation inflation. Show this policy outcome graphically using the IS-LM model assuming people believe the new policy is temporary. State any assumptions you make.

B. Show this policy outcome graphically using the DD-AA model assuming people believe the new policy is permanent. State any assumptions you make.

C. shows this policy outcome graphically using the relative demand-relative supply model. State any assumption you make.

D. Show this policy outcome graphically using the aggregate demand-aggregate supply model. State any assumption you make.

E. do all these models make the same predictions? Compare and contrast. Explain.

Reference no: EM13692323

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