ECON 2HH3 Study Guide - Final Guide: Floating Exchange Rate, Capital Outflow, Money Supply
22 Oct 2015
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Decrease exchange rate, increase net export, shift is. Increase equilibrium output, increase money supply, and decrease tax. Increase gov purchase, income rise, no effect on exchange rate. Increase in risk, lm shift right, is shift down, exchange rate decrease, income increase, interest rate increase. Price level falls, income rise, exchange rate depreciate, nx increase, lm shift. Fall in consumer confidence, fixed exchange rate: fall in consumption and income. Price level fall, producer didn"t expect it to fall, decrease production. Price level is greater than expect, output will greater than nature level of output, long run shift up. Demand pull inflation, inflation rise, and unempployment fall 1970. Cost-push inflation, inflation rise and unemployment rise 1980. Policymaker want reduce unemployment in short run, increase aggregate demand and cost higher inflation. Cut tax without cut gov spending, short run: high out put, low unemployment, rise consumption , rise interest rate, decrease investment.
