E1 Q2. Draw a IS-LM graph and to analyse theeffects of a decrease in the consumerconfidence on the economy (that isequilibrium output, interest rate, moneysupply, consumption and investment) underthe 2 scenarios:a) The central bank controls money supply.b) The central bank controls the interest rate.c) After the negative confidence shock, whatcan the government do to retrieve itsequilibrium output.d) Compare the magnitude of required fiscalresponse in a) and b) (more in part b) cases.can someone help with part D please , i needhelp and need to use graphs to outline

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Q2. Draw a IS-LM graph and to analyse the effects of a decrease in the consumer confidence on the economy (that is equilibrium output, interest rate, money supply, consumption and investment) under the 2 scenarios:

Q2. Draw a IS-LM graph and to analyse the effects of a decrease in the consumer confidence on the economy (that is equilibrium output, interest rate, money supply, consumption and investment) under the 2 scenarios:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.

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Q2. Draw a IS-LM graph and to analyse the
effects of a decrease in the consumer
confidence on the economy (that is
equilibrium output, interest rate, money
supply, consumption and investment) under
the 2 scenarios:
a) The central bank controls money supply.
b) The central bank controls the interest rate.
c) After the negative confidence shock, what
can the government do to retrieve its
equilibrium output.
d) Compare the magnitude of required fiscal
response in a) and b) (more in part b) cases.
can someone help with part D please , i need
help and need to use graphs to outline

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