How does the policy rate hitting a floor of zero lead to an upward sloping aggregate demand curve?
a. When the policy rate hits a floor of the zero, the positive relationship between inflation and the real interest rate embodied by the MP curve becomes negative, and this reversal results in higher inflation producing a higher real interest rate, and hence lower plannedspending, i. e., an upward sloping AD curve.
b. When the policy rate hits a floor of the zero, the negative relationship between planned spending and the real interest rate embodied by the IS curve becomes positive, and this reversal results in lower inflation producing a lower real interest rate, and hence lower planned spending, i. e., an upward sloping AD curve.
c. When the policy rate hits a floor of the zero, the positive relationship between inflation and the real interest rate embodied by the MP curve becomes negative, and this reversal results in lower inflation producing a higher real interest rate, and hence lower plannedspending, i. e., an upward sloping AD curve.
d. When the policy rate hits a floor of the zero, the negative relationship between inflation and the real interest rate embodied by the MP curve becomes positive, and this reversal results in lower inflation producing a higher real interest rate, and hence lower plannedspending, i. e., an upward sloping AD curve.
Answers: 2
Business, 21.06.2019 18:10
In a sumif conditional function, what should be the order of terms in the parentheses?
Answers: 1
Business, 22.06.2019 07:00
Amarket that consists of all possible consumers regardless of their specific needs or wants is a
Answers: 1
Business, 22.06.2019 07:30
Which of the following best describes why you need to establish goals for your program?
Answers: 3
Business, 22.06.2019 11:10
Sam and diane are completing their federal income taxes for the year and have identified the amounts listed here. how much can they rightfully deduct? • agi: $80,000 • medical and dental expenses: $9,000 • state income taxes: $3,500 • mortgage interest: $9,500 • charitable contributions: $1,000.
Answers: 1
How does the policy rate hitting a floor of zero lead to an upward sloping aggregate demand curve?...
Health, 12.02.2020 23:52
Computers and Technology, 12.02.2020 23:52
Mathematics, 12.02.2020 23:52
History, 12.02.2020 23:52
Mathematics, 12.02.2020 23:52
Chemistry, 12.02.2020 23:52
Computers and Technology, 12.02.2020 23:52
Mathematics, 12.02.2020 23:52