Describe How the Real Interest Rate Changes in a Keynesian

question 53

Essay

Describe how the real interest rate changes in a Keynesian model if a shock shifts the IS curve down and to the right and the Fed changes its policy to keep output unchanged.

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Definitions:

Biotic

Term that indicates life; a cell is an example of a biotic factor in the environment.

Energy Flow

The movement of energy through a food chain or ecosystem, typically from the sun through producers to consumers and finally to decomposers.

Trophic Level

The position an organism occupies in a food chain, based on its feeding relationships, ranging from primary producers to apex predators.

Ecosystem

A community of interacting organisms and their physical environment.