Homework Help: Macroeconomics

Posted by Anonymous on Saturday, December 6, 2008 at 12:31am.

The “Great Moderation” since 1985 could be due either to
smaller demand stocks when compared to the period prior to 1985 or to
a better response by monetary policymakers since 1985 to the same
demand shocks that occurred prior to 1985. Evidence to determine
which of these arguments is correct may be found by examining the
behavior of the interest rate since 1985. If the Great Moderation is
due to smaller demand shocks, then less variation in real GDP has
been accompanied by less variation in the interest rate as well. On
the other hand, if the Great Moderation is due to better response by
monetary policymakers to the same demand shocks as previously, then
the decline in the variation of real GDP has been accompanied by an
increase in the variation of the interest rate. Evaluate these
arguments using the IS-LM model.

Macroeconomics - economyst, Monday, December 8, 2008 at 11:38am
Do you have a question?

Or is your task to evaluate the arguments made using an IS/LM framework. If so, do a little research, then take a shot. I or others will be glad to critique your answer.
Macroeconomics - Jeanine, Saturday, December 20, 2008 at 3:34am
It a question that asks to evaluate the arguments made using an IS/LM. Please help.

Answer this Question

Related Questions

college - The yearly cost T, in thousands of dollars, of tuition and required ...
social studies - Does anyone know a place where I can find out what the required...
Algebra 1 - i need help working these correctly! 1. Are the inequalities 3x-4&...
Algebra - The town of appleville recorded the following dates and populations. ...
college algebra - 4. The yearly cost T, in thousands of dollars, of tuition and ...
Alg2 - the annual Gross Domestic Product (GDP) of a country is the value of all ...
Alg2 - he annual Gross Domestic Product (GDP) of a country is the value of all ...
Alg2 - The annual Gross Domestic Product (GDP) of a country is the value of all ...
Economics - If CPI was 108 in 1985 and 130 in 1990 (base year 1982-1984 = 100) -...
accounting-explain - April.4 purhcase merchandise from RediX, Inc.,$1900;term 2/...

For Further Reading

First Name:
School Subject:
Answer: