Answer to Question #153218 in Macroeconomics for AMINAH

Question

1. a) Explain the concept of demand curve for loanable funds.

b) Explain the concept of supply curve for loanable funds.

c) Explain the effect of increasing in government expenditure through selling of bonds on interest rate in classical model.

2. Please use a graph to produce aggregate supply in classical model under the assumption of nominal wage or money wage.

3. Explain the effect of increasing in money supply on price and national income using a classical theory.

4. Explain how interest rate is determined in a classical theory

Answer 1

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