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kolitchko kolitchko
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5 years ago
Suppose that many households look to the stock market to gauge how the economy is likely to perform in the future. When stock prices are rising, households will be optimistic about the future state of the economy and will increase their spending on houses and consumer durables, such as cars and furniture. When stock prices are falling, households will be pessimistic about the future and will cut back on their spending. If this view of the link between stock prices and household spending is correct, what will be the effect of a decline in stock prices on output in the new Keynesian view? Be sure to distinguish the short run from the long run.
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Money, Banking, and the Financial System

Money, Banking, and the Financial System


Edition: 3rd
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pepebillypepebilly
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kolitchko Author
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5 years ago
Smart ... Thanks!
jmelchor77
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Yesterday
Good timing, thanks!
Transonic
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2 hours ago
Thank you, thank you, thank you!
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