Consider the following version of a Classical Model.
n^d(w, r) = n^s(w) (1)
n = n^d(w) (2)
y = f(k, n) (3)
y = c(r, y - t) + I(r; y - t) + g (4)
M/P = L(i, y) (5)
What are the effects on this model economy of an unanticipated increase in the nominal money supply?
Step 1- take the derivatives of all the equation with respect to each variable
Step 2- used the derivative of equation 1-3 to find dr and dy
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- Thread Starter
- 29-09-2011 04:25
- 29-09-2011 04:42
Why are you posting this at 3.30am???