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Show what happens to output, consumption and investment, wages and unemployment if the Federal Reserve contracts...

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Economics

Show what happens to output, consumption and investment, wagesand unemployment if the Federal Reserve contracts the money supplyin the RBC model with nominal rigidities.

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4.3 Ratings (649 Votes)
Contracting money supplies means a reduction in the amount of capital available in the economy The Federal Reserve will sell bonds raise tax rates etc to reduce surplus capital in the    See Answer
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