Use the islm-adas framework to illustrate the short-run and
a) Use the IS/LM-AD/AS framework to illustrate the short-run and long-run effects of a decrease in the markup (m?). Assume rational expectations.
b) Explain the role of the interest rate here. That is, why does the interest rate have to fall?
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a use the islm-adas framework to illustrate the short-run and long-run effects of a decrease in the markup m assume
a use the is-lm ad-as model to illustrate the short-run and long-run effects of an unexpected decrease in the money
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