68 419
Assignments Done
98,6%
Successfully Done
In December 2018

Answer to Question #53433 in Macroeconomics for Jeremy

Question #53433
Following a rise in uncertainty leading to a fall in investment, what would be the FEDs appropriate monetary policy response assuming they want to hold interest rates constant? Demonstrate this using the IS LM model.

Does this mean interest rates must increase to previous levels using contraction policy?
Expert's answer
Following a rise in uncertainty leading to a fall in investment, the FEDs appropriate monetary policy response assuming they want to hold interest rates constant will be open market operations - the FED will sell new treasury bills.
This mean interest rates must increase to previous levels using contraction policy.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be first!

Leave a comment

Ask Your question

Submit
Privacy policy Terms and Conditions