Answered You can hire a professional tutor to get the answer.

QUESTION

In addition to consumption being a function of income, suppose that it is also a function of interest rates.

In addition to consumption being a function of income, suppose that it is also a function of interest rates. Now, lower interest rates make borrowing to consume easier, encouraging overall consumption.

How would such a change impact the shape of the IS and LM curves? AD curve?

How would such a change impact the effectiveness of monetary and fiscal policy?

Show more
LEARN MORE EFFECTIVELY AND GET BETTER GRADES!
Ask a Question