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Problems
Problem 2.1:
According to the aggregate demand curve, what is the effect on output or income
of a drop in the price level?
[Solution]
Problem 2.2:
How does the Mundell-Fleming model explain the downward sloping aggregate demand
curve?
[Solution]
Problem 2.3:
How does the Pigou model explain the downward sloping aggregate demand curve?
[Solution]
Problem 2.4:
How does the Keynes model explain the downward sloping aggregate demand curve?
[Solution]
Problem 2.5:
Explain the basics of the IS-LM model.
[Solution]
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