1. Analytical Problem 1. Use the IS-LM-FE model to determine the effects of the following on the general equilibrium values of r and Y: (d) Increase usage of ATMs in the banking system reduces Md.

Hint: Explain in your graph first what happens in the money market. Draw two diagrams: one for Ms and Md (with r and M in the axis), and another for the LM (with r and Y). How does the LM shift? Then in another graph show the adjustment to the final general equilibrium using the IS-LM-FE model. Total of 3 graphs: money market, LM, and general equilibrium. Make sure you start with the money market. (3 pts.)