1. Draw an IS/LM diagram which shows a macro equilibrium (use the â??intermediate range for the LM curve --- assuming the absolute value of lâ?? is less than infinity and greater than 0). Indicate the equilibrium interest rate by ro, and the equilibrium level of income by yo.

2 . Now suppose there is an increase in government spending financed by the Treasury selling bonds to the public (a pure fiscal policy).
a) Show the appropriate shifts in the IS and/or LM curve in the above diagram.
b) Indicate the new equilibrium income and interest rate by y1 and r1.
c) State what has happened to equilibrium income and interest rates.
d) Is the level of investment spending higher or lower than at ro,yo?
e) Has money demand changed? If so, how?
f) If the LM curve had been totally inelastic (lâ??=0) with respect to interest rates (vertical) would your answers to b) and e) change? If so, how and why.

Solution Preview

Macroecon: Intro to IS/LM help

1. Draw an IS/LM diagram which shows a macro equilibrium (use the â??intermediate range for the LM curve --- assuming the absolute value of lâ?? is less than infinity and greater than 0). Indicate the equilibrium interest rate by ro, and the equilibrium level of income by yo.
Please see figure 1 in the attachment.
2 . Now suppose there is an increase in government spending financed by the Treasury selling bonds to the public (a pure fiscal policy).
a) Show the appropriate shifts in the IS and/or LM curve in the above diagram.
A pure fiscal policy means that the government is increasing the national deficit. This shifts the IS curve to the right. (Please see figure 2 in the attachment. The reason for this shift is that ...

Solution Summary

IS/LM diagram is discussed very comprehensively in this explanation..

Please see the attached.
Consider the following Hasse diagram of a partial ordering relation R on a set A:
(a) List the ordered pairs that belong to the relation. Keep in mind that a Hasse diagram is a graph of a partial ordering relation so it satisfies the three properties listed in number 5 part(b).
(b) Find the (Boo

Using excel, develop a scatter diagram for the following sample data. How would you describe the relationship between the values?
X- Value
10, 8, 9, 11, 13, 11, 10, 7,7, 11
Y-Value
6, 2, 6, 5,7,6, 5, 2, 3, 7

Each record should have at least one primary key field specified. After identifying the records and their corresponding fields, draw an entity-relationship (ER) diagram using the MS Excel worksheet to illustrate the relationships between entities and attributes
Please see attached Excel sheet for given items.

2. A mini license plate for a toy car must consist of a number followed by two letters. Each letter must be a C, A or R. Each number must be a 3 or 7. Repetition of letters is permitted.
Use the counting principle to determine the number of points in the sample space.
Construct a tree diagram to represent this situation
Li

I have completed the block diagram for the attached question, however I am having problems deriving an expression for the transfer function, in terms of parameters k1, k2, k0 and kt.