What is the Fisher hypothesis? Does the experience of Latin American countries in the 1990s...
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Accounting
What is the Fisher hypothesis? Does the experience of Latin American countries in the 1990s as indicated in Chapter 14 support or refute this hypothesis?
If the Fisher hypothesis is true, then changes in the growth rate of the money stock translate one-for-one into changes in i. Explain this effect and explain in words how the change in both money growth and expected inflation would affect 1) the IS curve, 2) the LM curve. Then explain how the neutrality of money concept changes when we introduce the concept of real interest rates and how the IS curve shifts when the Federal Reserve expands the money supply by buying bonds through Open Market Operations.
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