Answered: In the IS/LM model, the fiscal policy…

In the IS/LM model, the fiscal policy multiplier with respect to interest rates is (α corresponds to alpha as defined in the lecture notes) αh/(h+αdk) -1/(h+αdk) k/h αk/(h+αdk) αd/(h+αdk)

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter11: Fiscal Policy

Section: Chapter Questions

Problem 8SQ

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Question

In the IS/LM model, the fiscal policy multiplier with respect to interest rates is (α corresponds to alpha as defined in the lecture notes)

αh/(h+αdk)

-1/(h+αdk)

k/h

αk/(h+αdk)

αd/(h+αdk)

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