Part 2 - Question 7 · Introducció a la Macroeconomia UPF 2018
Tema: Model IS-LM-PC: del curt al mig termini · Del examen Final Exam - April 2018 (2018)
Enunciado
Part 2
Part 2 - Question 7 [0.25 points]. Fiscal contraction in medium-run equilibrium
Consider an economy in medium run equilibrium, where its output is equal to its potential output. If (government expenditures) decreases, how must the Central Bank change the real policy interest rate to maintain the existing medium-run equilibrium?
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Solución
Según los criterios oficiales de corrección
If G (government expenditures) decreases, how must the Central Bank change the real policy interest rate to maintain the existing medium-run equilibrium?
Solución: c. A decrease in G shifts the IS curve to the left, causing a decrease in output below Yn. To return to Yn, the central bank must decrease the real policy rate, causing LM to shift down.
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