ECO 1102 Lecture Notes - Lecture 15: Market Liquidity, Monetary Policy, Aggregate Demand

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ECO 1102 Full Course Notes
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ECO 1102 Full Course Notes
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Feel free to take off the color coding by highlighting it all (ctrl + a) and changing it all to black. Deliberate, conscious effort of the government to intervene in the macro economy with an eye toward influencing the course of equilibrium p or q (real gdp) Fiscal policy is carried out by finance departments, and involves changing. T and/or g: 1) taxes, 2) government spending. Department of finance canada (federal government) conducts the fiscal policy. Raises interest rates which crows out investment sending and partially reverses the initial increase in aggregate demand. Monetary policy is executed by the bank of canada. Both of them (monetary policy and fiscal policy )operate through shifts in the ad curve. Stimulate investment spending and shifts aggregate demand to the. Back to the money market, with the supply and demand for money holdings (chapter 5) The theory of liquidity preference is related to the money demand curve.

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