2. Suppose the monetary policy curve is given by r= 1.5%+0.75 , and the IS curve is Y= 13-100r. a. Calculate an expression for the aggregate demand curve. b. Calculate aggregate output when the inflation rate is 2%, 3%, and 4%. c. Draw graphs of the IS, MP, and AD curves, labeling the points in the appropriate graphs from part (b) above.

2. Suppose the monetary policy curve is given by r= 1.5%+0.75 , and the IS curve is Y= 13-100r. a. Calculate an expression for the aggregate demand curve. b. Calculate aggregate output when the inflation rate is 2%, 3%, and 4%. c. Draw graphs of the IS, MP, and AD curves, labeling the points in the appropriate graphs from part (b) above.

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter16: Monetary Policy

Section: Chapter Questions

Problem 9SQ

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