Question

) Explain expansionary monetary policy using the following four macroeconomic models. Indicate what happens to real...

) Explain expansionary monetary policy using the following four macroeconomic models. Indicate what happens to real GDP (Y), the components of real GDP (C, I, G, NX), and the price level (P). Why are the answers different depending on the model used?


Short Run: Closed Economy (IS/LM)

Short Run: Aggregate Demand/Aggregate Supply

Long Run: Closed Economy (S = I)

Long Run: Small, Open Economy (S – I = NX)

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