4. Figure I shows the relationship between asset market and good market. Explain, how asset markets affect the good market and how the role of interest rates in the relationship. Why we need to introduce fiscal policy and monetary policy? Figure 1 Income Assets markets Goods market Money market Bond market Aggregate demand Output Demand Demand Supply Supply Interest rates Monetary policy Fiscal policy

4. Figure I shows the relationship between asset market and good market. Explain, how asset markets affect the good market and how the role of interest rates in the relationship. Why we need to introduce fiscal policy and monetary policy? Figure 1 Income Assets markets Goods market Money market Bond market Aggregate demand Output Demand Demand Supply Supply Interest rates Monetary policy Fiscal policy

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter36: Six Debates Over Macroeconomic Policy

Section: Chapter Questions

Problem 3PA

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