Question: COVID-19 and Monetary Policy in the IS-LM Model . Consider the following model of the goods market in a closed economy, where s measures the

COVID-19and Monetary Policy in the IS-LM Model.

Consider the following model of the goods market in a closed economy, wheresmeasures the extent of the spread of Covid- 19 within the country:

Z = C+I+G (1) Planned aggregate expenditure C = 5 + (0.8 - s) YD ( 2 ) Consumption function 1 = 2 - s + 0.2Y - 100i (3) Planned investment G = 2+s . (4) Government expenditure YD = Y - T (5) Disposable income T = 0.2Y (6 ) Tax function Y = Z (7) Equilibrium Condition and money market: (8) Money demand L = 5 + s + 0.125Y - 200i M M (9) Money supply = Uil (10) L= Money market equilibrium

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