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Assume economy is suffering a liquidity trap

Question # 00621190
Subject: Economics
Due on: 11/23/2017
Posted On: 11/23/2017 01:04 PM

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Using well-labelled graphs for the IS-LM, PS-WS and AS-AD models, show the adjustments

toward both the short run and medium run equilibrium under the following situations:

a) Assume economy is suffering a liquidity trap, and the European migrant crisis has made

consumers pessimistic about the future. Explain whether fiscal policy and conventional monetary

policy can be useful to solve the problem.(13 marks)

b) The government introduces a new paid-paternal leave scheme. (7 marks)

Tags trap liquidity suffering economy aume marks policy conventional fiscal explain future crisis consumers peimistic monetary useful paidpaternal leave scheme introduces government solve problem13 migrant european models adjustments short asad psws welllabelled graphs islm medium equilibrium

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Assume economy is suffering a liquidity trap

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Posted On: 11/23/2017 01:05 PM
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