The Economics of Money, Banking, and Financial Markets 10th Edition by Frederic Mishkin

تمرين 12

All applied problems are available in MyEconLab at www.myeconlab.com.
Assume the monetary policy curve is given by r = 1.5 + 0.75?.
a. Calculate the real interest rate when the inflation rate is 2%, 3%, and 4%.
b. Draw the graph of the MP curve, labeling the points from part (a).
c. Assume now that the monetary policy curve is r = 2.5 + 0.75?. Does the new monetary policy curve represent an autonomous tightening or loosening of monetary policy?
d. Calculate the real interest rate when the inflation rate is 2%, 3%, and 4%, and draw the new MP curve showing the shift from part (b).