1. Use the IS-LM model to determine the effects of each of the following on the general equilibrium values of the real wage, employment, output, real interest rate, consumption, investment, and price level.

a. A reduction in the effective tax rate on capital increases desired investment.

b. The expected rate of inflation rises.

c. An influx of working-age immigrants increases labor supply (ignore any other possible effects of increased population).

d. Increased usage of automatic teller machines reduces the demand for money.