Whether the response is theoretically consistent

Reference no: EM131223405

For each of the given, explain whether the response is theoretically consistent with a tightening of monetary policy and identify which of the traditional channels of monetary policy is at work:

a. Firms become more likely to undertake investment projects.

b. Households become less likely to purchase refrigerators and washing machines.

c. Net exports fall.

Reference no: EM131223405

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