The IS-LM-PC Model
15 important questions on The IS-LM-PC Model
What is the Philips Curve? Give the function.
pi-pi tot de macht e = - alpha (U-U n)
Other countries were affected by which two channels?
2. Financial -> U.S banks repatriated funds from other countries getting them into trouble as well.
Give the formula for employment, rather than U.
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Give a synonymen for natural level of output and give the respectable sign.
U.S recession turned into a world recession called?
What is it called when output is below its potential? What is the further gap mentioned in the book? 1.
What happens if output is below its potential? In order words what will happen if the output gap is negative?
When we consider the short-run equilibrium in the IS-LM-PC model, what happens over time if there is no change in policy rate?
Nor in any of the variables which affect the position of the IS curve?
Consider the medium-run in the IS-LM PC model. If an objective of the central bank is to achieve stable inflation and keep output at Yn, why doesn't the cb increase the policy rate right away to which output will perform at Yn?
When the cb has changed the policy rate r to a higher level and Yn is achieved. What do we further observe?
What is the confusing part of the philips curve about inflation?
Vraag leraresse
If Yn is achieved, what should the policy rate r be? In equilibrium?
What is the relation between output and the interest rate?
What is the relation between the zero lower bound and deflation?
And why is deflation a problem for the economy? What term do we use for this problem?
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