Calculations with the is curve: suppose the parameters of the is curve are a¯ = 0, ¯b = 3/4, r¯ = 2% and the real interest rate is initially r = 2%. explain what happens to short-run output in each of the following scenarios (consider each separately): the real interest rate rises from 2% to 4%. the real interest rate falls from 2% to 1%. a_c increases by 1 percentage point. a_g decreases by 2 percentage point. a_im decreases by 2 percentage point.
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Calculations with the is curve: suppose the parameters of the is curve are a¯ = 0, ¯b = 3/4, r¯ = 2...
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