lecture 4 Flashcards
(4 cards)
1
Q
monetary vs fiscal policy choice
A
depends on slope of IS and LM curve
2
Q
steep IS/flat LM curve
A
fiscal policy is more effective
3
Q
flat IS/steep LM curve
A
monetary policy is more effective
4
Q
aggregate demand relation
A
implies the level of output is a decreasing function of the price level. represented by the AD curve. shifts in IS and LM curve shift the AD curve
