Booms and recessions (IV): dynamic aggregate supply and demand - The DAD-SAS model at work
10 important questions on Booms and recessions (IV): dynamic aggregate supply and demand - The DAD-SAS model at work
When the central bank surprisingly raises money growth rate under flexible exchange rates, to what intersection does DAD1 shift?
How do DADt and SASt shift under adaptive expectations?
DADt intersects EAD(new) on Yt-1
Does does a permanent increase in money growth rate invoke under flexible exchange rates when inflation expectations adjust slowly?
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What is the real interest rate?
What is the main restriction of the Fisher equation?
What qualitative error does the Fisher equation give when used outside equilibria?
It undervalues interest rates during booms
Suppose individuals behave rationally, how does DADt shift?
Why does fiscal policy under fixed exchange rates never result in a new equilibrium?
What are - in words - the results from one time increased government spending under fixed exchange rates?
What is the bottem line in policy effectiveness in the DAD-SAS model?
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