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Can you help me to answer this question ataCKeu |_| I |_| Consider the economy of Wiknam. The consumption flmction is given by C =

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ataCKeu |_| I |_| Consider the economy of Wiknam. The consumption flmction is given by C = 250 + 0.6(YT). The investment flmction is I = 100 207". The money demand flmction is (M) = Y 20. P ll Round answers to two places after the decimal where necessary. (1. Suppose that government purchases are increased from 100 to 150. How does the IS curve shift? The IS curve shifts to the V by ' What are the new equilibrium interest rate and level of income? e. Suppose instead that the money supply is decreased from 2,875 to 2,500. How does the LM curve shift? What are the new equilibrium interest rate and level of income? (1. Suppose that government purchases are increased from 100 to 150. How does the IS curve shift? The IS curve shifts to the v by ' What are the new equilibrium interest rate and level of income? e. Suppose instead that the money supply is decreased from 2,875 to 2,500. How does the LM curve shift? What are the new equilibrium interest rate and level of income? The LM curve shift to the v by ' What are the new equilibrium interest rate and level of income? (Remember to use the rst IS curve not the new one from part (1)

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