Discuss the main factors affecting the position of the AA schedule
What will be an ideal response?
Changes in the domestic money supply; changes in the domestic price level; changes in the expected future exchange rate; changes in the foreign interest rate; and shifts in the aggregate real money demand schedule.
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With no Ricardo-Barro effect, a government budget surplus
A) decreases the demand for loanable funds and increases the real interest rate. B) increases the demand for loanable funds and lowers the real interest rate. C) increases the supply of loanable funds and lowers the real interest rate. D) increases the demand for loanable funds and raises the real interest rate. E) decreases the supply of loanable funds and lowers the real interest rate.
The Federal Open Market Committee (FOMC) is responsible for managing the nation's
A) domestic economic policy. B) international trade policy. C) money supply. D) gold and silver reserves. E) wage and retirement policies.