For Each of the Following Changes,what Happens to the Real

question 35

Essay

For each of the following changes,what happens to the real interest rate and output in the long run,after the price level has adjusted to restore general equilibrium? How would the results differ,if at all,between the classical and Keynesian model? Draw a diagram for each part to illustrate your result.
(a)Wealth rises.
(b)Money supply rises.
(c)The future marginal productivity of capital increases.
(d)Expected inflation declines.
(e)Future income declines.

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