Define what happens to macroeconomic aggregates

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Reference no: EM132200788

Question: Write a short essay for the following:

If the Federal Reserve were to target the price level, so that Pt = P, how would money supply change if productivity (At) suddenly decreased temporarily? Reason though what happens to macroeconomic aggregates such as Yt , Lt , effective Kt (such as through changed capital utilization), and how they cause the central bank to change money supply Mt to keep Pt constant.

Reference no: EM132200788

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