ECON 2105 1nd Edition Lecture 26 Outline of Last Lecture I. Exchange Rates II. Appreciation III. Foreign Exchange Markets Outline of Current Lecture I. Case 1 Current LectureModule 45• Most macroeconomic problems have the following components:1. A starting point2. A pivotal event3. Initial effects of the event4. Secondary and long-run effects of the event• Case-1:1. Assume the U.S. economy is currently operating at an aggregate output level above potential output. 2. Draw a correctly labeled graph showing aggregate demand, short-run supply, long-run aggregate supply, equilibrium output, and the aggregate price level. These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.– Now assume that the Federal Reserve conducts contractionary monetary policy. – Identify the open-market operation the Fed would conduct (_______________________________), and draw a correctly labeled graph of the money market to show the effect of the monetary policy on the nominal interest
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