4 The following MACRO aggregates are for an economy:

Mt= Transaction Demand for Money Mt=0.5Y

Msp= Speculative Demand for Money Msp=105-1500

Ms= Money Supply Ms=150

Md, Money demand Md= Mt+ Msp

Derive the LM curve.

Solve for i, interest rate.

Solve for Y,income level.

5 The following MACRO functions are given for an economy:

Consumption C =100 +0.8Y

Savings S=-100+0.2Y

Investment I = 120-5i

Money Supply Ms=120

Money Demand Md=0.2Y-5i

Find the IS equation.

Find the LM equation.

Find i, interest rate.

Find Y, equilibrium level of income.

6 Consider the following economy:

Consumption C = 100+0.8Yd Yd= Y - T

Investment I =50-25i

GOVT Expenditures G = 50

TAXES T = 50

Ms, Money Supply Ms=200

Md, Money Demand Md=Y -25i

Find the IS equation.

Find the LM equation.

Find i, interest rate.

Find Y, equilibrium level of income.