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Homework answers / question archive / Let's consider the recent announcement of the effectiveness of various COVID vaccines
Let's consider the recent announcement of the effectiveness of various COVID vaccines. Suppose this news increased optimism about the trajectory for the economy and boosted both consumption and investment spending.
Would this increased optimism be represented as a shift in the IS and/or LM curve(s)? In which direction? Briefly explain the channels through which this confidence shock works through the macroeconomy.
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