Question: handwritten solution not required correct answer will get instant upvote 3. Consider the following SR model (i.c., IS-LM in {-Y space, with P fixed); all

handwritten solution not required correct answer will get instant upvote

3. Consider the following SR model (i.c., IS-LM in {-Y space, with P fixed); all amounts are in millions of $: C = 50 +0.6 Yo T- 20 G - 300 1-450 +0.2 Y - 1500 a. Derive the IS equation in the form Y = function (i..) b. The Central Bank sets an interest rate of 10%. What is the full SR model cam, Y? Use (M/PY 3Y-40001 to calculate what the real Ma is at this full SR com, Graph the equilibrium in three, appropriately linked-up OR separate graphs: (Y. (M/P), and Z-Y spaces. c. Suppose Congress decides to decrease G from 300 to 200, cet. par. What will the new cam Y be? Show the effects of this G policy in the 3 graphs of part b. above, Present and discuss all changes in all IS and I'M components

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