Macro- & Monetary Economics

Prio: Normal, Part II: Keynes, Type: MC, Quiz 2

In the neoclassical model, suppose that the government increases government spending, i.e. engages in expansionary fiscal policy. This can lead to a fall in the real interest rate when

  • the shift in output supply is smaller than the shift in output demand
     
  • the shift in output supply is larger than the shift in output demand
  • the price level rises in order to clear the money market
     
  • the price level falls in order to clear the money market
 

Diskussion