Assume economy is suffering a liquidity trap

Question # 00621190 Posted By: dr.tony Updated on: 11/23/2017 01:04 PM Due on: 11/23/2017
Subject Economics Topic Macroeconomics Tutorials:
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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)

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  1. Tutorial # 00619876 Posted By: dr.tony Posted on: 11/23/2017 01:05 PM
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