Assume the economy starts at long run equilibrium

Reference no: EM13692551

For each of the following shocks, describe how monetary policymakers would respond (if at all) to stabilize economic activity. Assume the economy starts at long run equilibrium.

a) Consumers reduce autonomous consumption.

b) Financial frictions decrease.

c) Government spending increases.

d) Taxes increase.

e) The domestic currency appreciates.

Reference no: EM13692551

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