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| Topic: |
Business
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| Number of pages / Number of words: |
5 / 1372 |
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Then an increase in demand for the CNY which will lead to an increase in r in China, this leads to a decrease in Investment. Hence there will be a left shift in the IS curve in China. This gives us a new equilibrium point at B Y2-r2. We see that there has been a decrease in Y from Y1 to Y2, which means a decrease in Production...
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A decrease in Production will lead to fewer available jobs and this will give a higher Unemployment rate.
2) AD/AS – from this model we will also see the effect on production and Unemployment and Inflation in China. See appendix 2 Figure 2.2 for model and definition. First we have equilibrium at point A P1-Y1...
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