What happens to the aggregate demand curve

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Reference no: EM13205717

Suppose the bank of canada reduces the money supply by 5%.

a. what happens to the aggregate demand curve?
b. What happens to the level of output and the price level in the short run and long run?
c. according to okun's law, what happens to unemployment in the short run and in the long run? ( hint: okuns law is the relationship between out and unemployment)

d. what happens to the real interest rate in the short run and the long run? ( hint use the model for the real interest rate to see what happens when output changes)

Reference no: EM13205717

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