Question: . Using figures and within the IS-LM framework, explain the effect of the following policies. Assume money supply (M) and government expenditures (G) increase under

. Using figures and within the IS-LM framework, explain the effect of the following policies. Assume money supply (M) and government expenditures (G) increase under each policy: 1.1. Temporary Monetary Policy Under Floating Exchange Rates. (6 points) 1.2. Temporary Monetary Policy Under Fixed Exchange Rates. (6 points) 1.3. Fiscal Policy Under Floating Exchange Rates. Explain the crowding out and its effect. (8 points) 1.4. Fiscal Policy Under Fixed Exchange Rates (6 points) Explain changes in the main economic variables: interested rate (i), Demand (D), Output (Y), and exchange rate (E). 2. Explain the liquidity trap. Use figures to explain why monetary policy is ineffective in this situation. What about fiscal policy(7points)

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