Assume in Albania, money demand is very sensitive to the interest rate. That means that when the interest rate increase, money demand decreases very…

January 23, 2021/in Grade Tutors Science Help Online /by admin

Assume in Albania, money demand is very sensitive to the interest rate. That means that when the interest rate increase, money demand decreases very significantly. Assume the Albanian policymakers are considering ways to increase GDP (income Y). What kind of policy will work best in Albaina? (Use IS-LM curves to answer). (Consider both monetary and fiscal policy—which will work best and why?) DRAW graphs of IS and LM.

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Assume in Albania, money demand is very sensitive to the interest rate. That means that when the interest rate increase, money demand decreases very…

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