question archive Use the IS/LM model to predict how each of the following shocks would likely affect real aggregate income (Y) and the overall level of real interest rates (r) in the short run, all else equal
Use the IS/LM model to predict how each of the following shocks would likely affect real aggregate income (Y) and the overall level of real interest rates (r) in the short run, all else equal
Subject:EconomicsPrice: Bought3
Use the IS/LM model to predict how each of the following shocks would likely affect real aggregate income (Y) and the overall level of real interest rates (r) in the short run, all else equal. In each case, be sure to make a prediction (up, down, or no change) for both variables, explain your predictions intuitively, and illustrate them with an IS/LM diagram. a. Government purchases decline (G down) b. The nominal money supply increases (M up) c. Autonomous consumption increases (co up) d. Total factor productivity increases (A up)
