1. Using algebraic presentation answer the following questions:(a) Compute the slope of LM schedule; and what are factors that shift LM schedule?(b) Compute the slope of IS schedule and what factors determine shift in IS schedule?(c) Find the equilibrium income and the interest rate in the ISLM model?2. Suppose we had a case in which the interest elasticity of both money demand and investment were quite low. Would either monetary or fiscal policy be effective? How would you interpret the such a situation?3. (a) Keynes believed that the money wage would not adjust sufficiently to keep economy at full employment. Explain.(b) Within the variable pricevariable wage of the Keynesian model, analyze the effects of (i) an increase in government spending, (ii) an increase in the money supply and (ii) an unfavorable supply shock on the economy.

1. Using algebraic presentation answer the following questions: (a) Compute the slope of LM schedule; and what are factors that shift LM schedule? (b) Compute the slope of IS schedule and what factors determine shift in IS schedule? (c) Find the equilibrium income and the interest rate in the IS-LM model? 2. Suppose we had a case in which the interest elasticity of both money demand and investment were quite low. Would either monetary or fiscal policy be effective? How would you interpret the such a situation? 3. (a) Keynes believed that the money wage would not adjust sufficiently to keep economy at full employment. Explain. (b) Within the variable price-variable wage of the Keynesian model, analyze the effects of (i) an increase in government spending, (ii) an increase in the money supply and (ii) an unfavorable supply shock on the economy