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What are the financial frictions and how do they affect the IS curve? What role do financial frictions play in starting or intensifying recessions?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter24: The Aggregate Demand/aggregate Supply Model

Section: Chapter Questions

Problem 38RQ: What is the Keynesian zone of the SRAS curve? How much is the price level likely to change in the...

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What are the financial frictions and how do they affect the IS curve? What
role do financial frictions play in starting or intensifying recessions?

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