Solved: Explain what happens to economic activity in the short run, Macroeconomics

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Explain what happens to economic activity in the short run

Problem

Lowering the nominal interest rate: Suppose the Fed announces today that it is lowering the fed funds rate by 50 "basis points" (that is, by half a percentage point). Using the IS-MP diagram, explain what happens to economic activity in the short run. What is the economics underlying the response in the economy?

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Macroeconomics: Explain what happens to economic activity in the short run

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Macroeconomics: Explain what happens to economic activity in the short run

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