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Answer both the part of the question IS-LM Theory 3) Consider the following numerical example of the IS-LM model: Consumption Function : C = 100

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Answer both the part of the question 
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IS-LM Theory 3) Consider the following numerical example of the IS-LM model: Consumption Function : C = 100 + 0.3YD (where YD is disposable income) Investment Function : 1 = 150 + 0.2Y - 1000r (Y is the aggregate output and r is the rate of interest) Tax Function : T = 100 Government Expenditure : G = 200 Supply of Money : MS = 1200 Demand for Money : MD = 2Y - 4000r 3.(a) Find the equation for aggregate demand (Y). * Your answer 3.(b) Derive the IS relation * Your answer 3. (c) Derive the LM relation if the central bank sets an Interest rate of 1%. "3. (c) Derive the LM relation if the central bank sets an interest rate of 1%. " Your answer 3. (d) Solve for the equilibrium values of output, interest rate, C and |* Your answer 3. (e) Suppose that the central bank increases money supply to 1500. What is the impact of this expansionary monetary policy on the IS and LM curves? Find the new equilibrium values of output, Interest rate, C and L . Your answer 3. (f)Suppose that the government increases its spending (G) to 300. What is the Impact of this expansionary fiscal policy on the IS and LM curves? Find the new equilibrium values of output, Interest rate, C and

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