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An unanticipated expansionary monetary policy has been implemented. Indicate the impact of this policy on each...

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Finance

An unanticipated expansionary monetary policy has beenimplemented. Indicate the impact of this policy on each of thefollowing four variables:

a. Inflation rate.

b. Real output and employment.

c. Real interest rate.

d. Nominal interest rate.

Answer & Explanation Solved by verified expert
4.0 Ratings (733 Votes)
a Inflation By following expansionary monetary policy the money supply increases Hence the demand of products and services will increase but supply remains same Hence inflation will be    See Answer
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An unanticipated expansionary monetary policy has beenimplemented. Indicate the impact of this policy on each of thefollowing four variables:a. Inflation rate.b. Real output and employment.c. Real interest rate.d. Nominal interest rate.

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