Macroeconomics 12th Edition by Rudiger Dornbusch, Stanley Fischer ,Richard Startz

Exercise 9

In Figure 12-10 the economy can move to full employment by an expansion in either money or the full-employment deficit. Which policy leads to E 1 and which to E 2 How would you expect the choice to be made Who would most strongly favor moving to E 1 versus E 2 What policy would correspond to "balanced growth"