Using the ISLM model, show graphically and explain the effects of a monetary contraction. What is the effect on the equilibrium interest rate and level of output?
What will be an ideal response?
See figure below.
The monetary contraction shifts the LM curve to the left. The result is that the equilibrium level of output falls and the equilibrium interest rate increases.
Economics
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If you invest $4,000 in a savings account paying 3 percent interest, how much will your investment be worth in 25 years?
What will be an ideal response?
Economics
Based on the figure above, if the factory owned the river then at the equilibrium, marginal social cost would ________ marginal benefit, and the quantity of chemical produced would be ________
A) exceed; above the efficient quantity B) exceed; below the efficient quantity C) be below; above the efficient quantity D) be below; below the efficient quantity E) equal; efficient
Economics