Question: Repeat Problem 6 for the assumption that the full-employment level of national income is YE = 1000. Problem 6 Draw on graph paper a figure

Repeat Problem 6 for the assumption that the full-employment level of national income is YE = 1000.

Problem 6

Draw on graph paper a figure similar to Figure 18.4, but without the broken curves IS′ and LM′ and assuming that the full-employment level of national income is YF = 1200. Indicate on your figure the appropriate mix of fiscal and monetary policies required for the nation to achieve simultaneously internal and external balance under a fixed system.

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