ECON MACRO
5th Edition
ISBN: 9781337000529
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 11, Problem 2.9P
To determine
the assumption of classical economists with regards to the flexibility of wages, prices and interest rates, the implication of self- correcting tendenciesin an economy in case of recession and the disagreements of k’s with classical economists.
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How would the level of aggregate demand be affected by a rise in the interest rate in the Keynesian theory? Which components would be affected most strongly?
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