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Business, 03.12.2019 20:31 iajiborode8944

Using the exercise in the book and that you saw in class, answer the following question about the is curve suppose the parameters of the is curve are 2-0, b=3/4, and r = 2% (where the lower bar coefficients represent the upper bar coefficients, according to class and book notation). suppose further that initially the real interest rate r-2%. explain what happens to short-run output (sro) if: the real interest rate falls from 2% to 1%. sro will increase by 0.75%. sro will decrease by 0.75%. sro will remain constant. sro will increase by 1.5%.

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