In order to mitigate the economic impacts of the COVID-19 recession, the Government plans to run large budget deficits to improve infrastructure and build more public and transitional houses in New Zealand. Briefly describe the impact of this budget plan (with everything else held constant) on the following variables in the short run. (a) aggregate demand; (b) the price level; (c) the supply of loanable funds; (d) the real interest rate; (e) the relative attractiveness of NZD-denominated assets; (f) net foreign investment; (g) the exchange rate of the NZ dollar;

In order to mitigate the economic impacts of the COVID-19 recession, the Government plans to run large budget deficits to improve infrastructure and build more public and transitional houses in New Zealand. Briefly describe the impact of this budget plan (with everything else held constant) on the following variables in the short run. (a) aggregate demand; (b) the price level; (c) the supply of loanable funds; (d) the real interest rate; (e) the relative attractiveness of NZD-denominated assets; (f) net foreign investment; (g) the exchange rate of the NZ dollar;

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Classical Macroeconomics And The Self Regulating Economy

Section: Chapter Questions

Problem 15QP

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