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12-03-2024
Business

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Assume the US economy is currently operating at full employment; show the effect of an increase income abroad on our economy. 6 points
Does this create an inflationary or recessionary gap
What happens to the unemployment rate?
What monetary policy action (expansionary or contractionary) could be used to get the US back to full employment? (Be sure to state what happens to the supply of $, and the interest rate?)
Show on your graph the effects of this monetary policy action on the US economy.

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