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According to the Keynesian IS-LM Model,what Is the Effect of Each

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Essay

According to the Keynesian IS-LM model,what is the effect of each of the following on output,the real interest rate,employment,and the price level? Distinguish between the short run and the long run.
(a)Expected inflation rises.
(b)Wealth increases.
(c)Labor supply decreases due to a change in demographics.
(d)The future marginal product of capital decreases.


Definitions:

Total Costs

The total of variable and fixed expenses a business faces during the manufacturing of products or delivery of services.

Inverse Demand Function

Expresses the price of a good or service as a function of the quantity demanded, illustrating how price varies with changes in demand.

Unit Tax

A fixed amount of tax imposed on a product or service, regardless of its price.

Total Costs

The combined amount of all the costs associated with the production of goods or services, including both fixed and variable costs.

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