• Given following information:Y = 4000 - 200iThe IS equationMs/P = 2000Vertical LM• Calculate equilibrium interest rate and GDP?Suppose Fed uses easy monetary policy and increase the money supply to $3000.Calculate new equilibrium interest rate and GDP? Is this policy effective?2- Suppose following information:Y = 2000Vertical ISY = 1000 + 100iThe LM equation!!Calculate equilibrium interest rate and GDP?Suppose Fed uses easy monetary policy and increase the money supply to Y = 1500+100i. Calculate new equilibrium interest rate and GDP? Is this policy effective?!!

Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

• Given following information: Y = 4000 - 200i The IS equation Ms/P = 2000 Vertical LM • Calculate equilibrium interest rate and GDP? • Suppose Fed uses easy monetary policy and increase the money supply to $3000. Calculate new equilibrium interest rate and GDP? Is this policy effective?

• Given following information: Y = 4000 - 200i The IS equation Ms/P = 2000 Vertical LM • Calculate equilibrium interest rate and GDP? • Suppose Fed uses easy monetary policy and increase the money supply to $3000. Calculate new equilibrium interest rate and GDP? Is this policy effective?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

• Given following information:
Y = 4000 - 200i
The IS equation
Ms/P = 2000
Vertical LM
• Calculate equilibrium interest rate and GDP?
Suppose Fed uses easy monetary policy and increase the money supply to $3000.
Calculate new equilibrium interest rate and GDP? Is this policy effective?
2- Suppose following information:
Y = 2000
Vertical IS
Y = 1000 + 100i
The LM equation
!!
Calculate equilibrium interest rate and GDP?
Suppose Fed uses easy monetary policy and increase the money supply to Y = 1500
+100i. Calculate new equilibrium interest rate and GDP? Is this policy effective?
!!

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