1.Show graphicallywhat happens in the money market if the central bank decides to decrease the discount rate during a recession.

2. What happens in the money market if there is a deflation and the central bank decreases the discount rate.Show it graphically.

3. What happens in the money market if there is a deflation, how does the central bank reactto keep r constant?Explain in details using graphs.

4. What are the tools of a "contractionary" monetary policy?

5. What are the tools of an "expansionary" fiscal policy?

6. If money demand has decreased (but prices are given to be fixed) and Money supply is constant (meaning that the central bank did not react).However, r has returned back to equilibrium. What could be the reason behind this?Explain in details and show it graphically.

7. Show the effect of deflation on r and Y (using graph).

8. Show the deflationary effect on Pillips Curve.

9. If there is a contractionary fiscal policy and the Fed changes money supply to keep r constant. Show it graphically.

10. Use graphs to show the effects of an increase in z and a decrease in government expenditure on r and Y (hint: explain all cases).

11. What happens in the goods market if there is a decrease in the price of oil but there is no change in fiscal policy.

12. What happens in the goods market if there is an increase in the price of raw material and a decrease in government spending. Show graphs.