7. Suppose the government increases purchases in an economy with a

recessionary gap. How would this policy affect bond prices, interest

rates, investment, net exports, real GDP, and the price level? Show your

results graphically.

8. Suppose the government cuts transfer payments in an economy with an

inflationary gap. How would this policy affect bond prices, interest

rates, investment, the exchange rate, net exports, real GDP, and the

price level? Show your results graphically.

9. Suppose that at the same time the government undertakes expansionary

fiscal policy, such as a cut in taxes, the Fed undertakes contractionary

monetary policy. How would this policy affect bond prices, interest

rates, investment, net exports, real GDP, and the price level? Show your

results graphically.

[NOTE]I'd like you to send typing version of these answers not hand-writing.