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Jennilyn G.


1 week ago

. Demonstrate graphically how U.S. consumers benefited from the end of the quota system.

University of Minnesota - Duluth


Show, using the AD/AS model, how governments can use monetary policy to decrease the price level.


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Video Transcript

monetary policy to lower the price level would be known as contractionary monetary policy. And one of the things that could fall under contractionary monetary policy would be an increase in interest rates and by increasing interest rates were going to discourage investment and consumption, thereby reducing aggregate demand. So if we were to decrease aggregate demand, we're going to see that c. R a. D curve shift to the left from 81 to 82. This new shift is giving us, of course, a new equilibrium, which we can see right here, which is at a lower price level. So, by lowering aggregate demand through this use of contractionary monetary policy were seen as a result that the price level has been lowered.

University of Minnesota - Duluth
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