11) Algebra of IS-LM - use the following equations to solve the problems below.

C=200+0.75(Y-T)

I=200-25r

G=T=100

Solve for the Goods Market equilibrium for given values of r = 0, 1, 2, 3....8%.This will give you the IS curve.

Let (M/P)^d=Y-100r and M=1000, P=2 and solve for the Money Market equilibrium for values of r = 0,1,2,3 ... 8%.This will give you the LM curve.

Using your calculations in a) and b), what is the equilibrium r and Y that clears both the money and goods market?

If G rises to 150, which curve will shift (IS or LM) and how will Y and r change?Prove this with some calculations.

If M rises to 1200, with G=100, which curve will shift (IS or LM) and how will Y and r change?Prove this with some calculations.

If P increases to 4, with M=1000 and G=100, which curve will shift (IS or LM) and how will Y and r change.Prove this with some calculations.