ch 20 econ

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When using the Fed model to diagnose the economy, if a shock causes the real interest rate to rise, then the economy has been hit by _____ shock.
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The economy shown here begins at a 0% output gap. Now suppose that manufacturers in China face rising costs of rubber as an input. This leads to:unexpected inflation of 1%In the IS-MP analysis in the Fed model, a decrease in the risk-free rate shifts the:MP curve downTariffs on inputs lead to a _____ shock.supplyIf a spending shock increases aggregate expenditure by $35 billion and the multiplier is 2.5, then the IS curve will shift:right by 87.5 billion (multiply)In the IS-MP analysis in the Fed model, contractionary fiscal policy will shift the:IS curve to the leftWhen using the Fed model, the first step is to:identify the shock and shift the curveOnce you have identified the point of equilibrium in the IS-MP graph in the Fed model, the horizontal axis will show you the:output gapWhen a spending shock occurs, the IS curve shifts by the:change in spending times the multiplierOnce you have connected the output gaps from the IS-MP model and the Phillips curve, the next step is to identify the:unexpected inflation from the Philips curve