Question: Assume that we have the following data: C=100+0.50Y I p =100-20r M t =0.10Y M s =100-10r M=80 a. Build the IS-LM function. b. If

Assume that we have the following data:

C=100+0.50Y

Ip=100-20r

Mt=0.10Y

Ms=100-10r

M=80

a. Build the IS-LM function.

b. If we assume an increase in Investments by 100 units, please calculate again the IS-LM functions.

c. The intersection of IS-LM functions defines four areas. Analyze the behavior of the markets for goods and money for each area.

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