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After carefully reading all the available information, prepare a two page (double-spaced) essay and answer the following questions:
Assume that we have the following data:
C = 100+0.50Y
Ip = 100-20r
Mt = 0.10Y
Ms = 100-10r
M = 80
a. Build the IS-LM function.
b. If we assume an increase in Investments by 100 units, calculate again the IS-LM functions.
c. The intersection of IS-LM functions defines four areas. Analyze the behavior of the markets for goods and money for each area.
Cite references to material that you use in preparing the essay.
After carefully reading all the available information, prepare a two page (double-spaced) essay and answer the following questions: Assume that we have the following data: C=100+0.50Y Ip=100-20r Mt=0.10Y Ms=100-10r M=80 a. Build the IS-LM function. b. If we assume an increase in Investments by 100 units, calculate again the IS-LM functions. c. The intersection of IS-LM functions defines four areas. Analyze the behavior of the markets for goods and money for each area.
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