Question: Consider a two-nector model with the following information for the imaginary econormy of Nincland: Consumption: C=90+0.9YD Investment: I=900900i Money demand: (PM)d=0.9Y900i There are no taxes,

Consider a two-nector model with the following information for the imaginary econormy of Nincland: Consumption: C=90+0.9YD Investment: I=900900i Money demand: (PM)d=0.9Y900i There are no taxes, government spending, or foreign trade in Nineland. The year is 1999 in Nineland. The price level is 1. The money supply is 900 in 1999. 2 a. Derive and graph the equations of the IS and LM curves for the year 1999. Specify their slope. b. Find the simultaneous equilibrium level of income and interest rate. c. Show on a graph what happens if the money supply is increased above 900 in 1999. Consider a two-nector model with the following information for the imaginary econormy of Nincland: Consumption: C=90+0.9YD Investment: I=900900i Money demand: (PM)d=0.9Y900i There are no taxes, government spending, or foreign trade in Nineland. The year is 1999 in Nineland. The price level is 1. The money supply is 900 in 1999. 2 a. Derive and graph the equations of the IS and LM curves for the year 1999. Specify their slope. b. Find the simultaneous equilibrium level of income and interest rate. c. Show on a graph what happens if the money supply is increased above 900 in 1999

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