1. (a) derive the AD curve using the IS - LM framework with detailed explanation

(b) using the quantity theory ofoney and the Fisher equation explain in details how the rate of growth of money affects the nominal interest rate?

Given that in an economy. C = O-SCI - tsy , t = 0.25 , 2:900-501, G = 800 , L= 0. 25 x- 62.51 ( M / P ) = 500 ( a) Devine the equation for the Is wille. Derive the LM equation. (c) what are equilibrium levels of y and?. Explain policy mix . What is its significance. Explain using diagrams.Q1. is Suppose that in an economy ( = 100 + 0 . 8 , I : 70 , 6 = 200 , TR = 150, t = 0 20 ") Calculate equilibrium level of income and multiplier calculate budget surplus (c) what will be the new equilibrium income and new multiplier if t increases to 025. (i) Derive the balanced budget multiplier. (1li) Under what circumstances can the LM curve be horizontal ? use a diagram also. AnswerTo Explain the following concepts ( ) Business fixed investment Capital ALL () Net factor income from abroad. Assume factor-people of the country expect inflation to be equal to Sto by the end of the solwouon] jo jooune mun 20m century but in fact prices rise by 20 % Over these 10 decades. Describe how this unexpectedly high inflation rate would help or hurt the following . (9) A firm that provides nominal pension when worker retires. A person taking out a mortgage in 1950 for 50 years.(as using QTM and the fisher equation explain in detail how rate of grouth of money affects the nominal interest rate Derive the AD wu using the IS-LM framewe with detailed explanations."Call" In the classical model, levels of output and employment are determined solely by supply sidefactors ". Elaborate. Classical dichotomy and money neutrality Explain.Given that in an economy C = 0-SCI - tsy , t = 0. 25 , 1 = 900 - 501 , G = 800 , 1 = 0 25 7 - 62.51 ( M / P ) = 500 (as Derive the equation for the IS wille, b ) Derive the LM equation. (c) what are equilibrium levels of y and i. (it's Explain policy mix What is its significance Explain using diagrams