Macroeconomics (sixth edition), by Olivier Blanchard David R. Johnson, Pearson, 2012. , page 105-106 Consider the following
Question:
Macroeconomics (sixth edition), by Olivier Blanchard David R. Johnson, Pearson, 2012. , page 105-106
Consider the following IS–LM model: C = 200 + .25YD I = 150 + .25Y - 1000i G = 250 T = 200 1M>P2d = 2Y - 8000i M>P = 1600
Q4. (f) Now suppose that the money supply increases to M/P = 1,840. Solve for Y, i, c, and T, and describe in words the effects of an expansionary monetary policy Use IS-LM model to demonstrate your answer.
(g), Set M/P equal to its initial value of 1,600. Now suppose that government spending increases to G = 400. Summarize the effects of an expansionary fiscal policy on Y, i, and C.
Use IS-LM model to demonstrate your answer.
Q7. Policy mixes Suggest a policy mix to achieve each of the following objectives.
a. Increase Y while keeping i constant. Use IS-LM model to demonstrate your answer.
b. Decrease the fiscal deficit while keeping Y constant. What happens to i? To investment? Use IS-LM model to demonstrate your answer
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill