In the IS-LM Model, consider an expansionary fiscal policy with no change in the money supply. What is the effect of this policy on GDP, interest rate and private sector investment spending?

IS Curve Shifts Right, LM Curve is Unchanged

Output and Interest rate increase

IS Curve Shifts Left, LM Curve is Unchanged

Output and Interest rate decrease

Consider: C= 200+0.25Yd I= 150+0.25Y-1000i G=250 T=200 (M/P)d= 2y-8000i (M/P) = 1600 What is the IS Curve and LM Curve

Y = 1100-2000i and i=Y/4000-1/5

Y = 1200-1800i and i=Y/3400-1/6

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dylan_earl 2 questions Updated 19 Feb 2016

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1In the IS-LM Model, consider an expansionary fiscal policy with no change in the money supply. What is the effect of this policy on GDP, interest rate and private sector investment spending?
1. AIS Curve Shifts Right, LM Curve is Unchanged
2. BIS Curve Shifts Left, LM Curve is Unchanged
3. COutput and Interest rate increase
4. DOutput and Interest rate decrease
2Consider:
C= 200+0.25Yd
I= 150+0.25Y-1000i
G=250
T=200
(M/P)d= 2y-8000i
(M/P) = 1600

What is the IS Curve and LM Curve
1. AY = 1100-2000i and i=Y/4000-1/5
2. BY = 1200-1800i and i=Y/3400-1/6
3. CY = 1300-1700i and i=Y/4200-5

Description: University Macro ((d)Ch 6: Labour Market (exam)) Quiz on Macro Chapter 6 Quiz, created by dylan_earl on 01/04/2015.
Author: dylan_earl
Language: English
Views: 2
History: Created on 1 Apr 2015 · updated on 19 Feb 2016
Tags: macro (d)ch 6: labour market (exam)university
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