Explain effects on real interest rate-wages-aggregate output

Assignment Help Macroeconomics

Reference no: EM133953140

Questions

1. In the monetary intertemporal model seen in class, explain and illustrate graphically how decreases in z and 2' affect the economy using output supply and demand, labour supply and demand and money supply and demand. (Assume that the direct effect of a decrease in z on the supply of goods is larger that the anticipated decrease in future TFP, 2').

2. Explain the effects on real interest rate, wages, aggregate output, prices. employment, consumption, and investment.

3. Suppose that the government decides to print money to ?nance a lump sum transfer of money to the representative consumer. Explain and illustrate graphically what would happen in the goods market, output market and money market as a result of this one-time printing of money.

Reference no: EM133953140

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