Limited access

Upgrade to access all content for this subject

In 2008, the US economy fell into a major recession. In response to the recession, the monetary authority (The Federal Open Market Committee – FOMC) significantly increased the money supply.

In a Keynesian model where only a fraction of firms in the economy have fixed prices, we would expect output to
Select Option increasedecreasestay the same
, price levels to
Select Option increasedecreasestay the same
, and interest rates to
Select Option increasedecreasestay the same
as a result of this monetary injection.
Select an assignment template