Answer to Question #92698 in Macroeconomics for Nes

Question #92698
With the help of an IS-LM diagram show the effect of restrictive monetary policy on output under flexible exchange rates and with perfect capital mobility.
1
Expert's answer
2019-08-15T09:21:30-0400

Restrictive monetary policy will shift LM curve to the left, as a result the equilibrium interest rate will increase, and the output will decrease.


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