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g) (40 points) Now draw four separate diagrams: (40 points total) Top left: a desired savings equals desired investment (S* = I), Top right: a
g) (40 points) Now draw four separate diagrams: (40 points total) Top left: a desired savings equals desired investment (S* = I"), Top right: a FE - IS - LM diagram, Bottom left: a money market diagram, Bottom right: An AD - AS diagram, locating this initial equilibrium point as point A. BE SURE to LABEL all diagrams completely (10 points for each correctly drawn and labeled diagram...each diagram will have three different equilibriums points A, B, and C) SCENARIO #1 - AN LM SHOCK
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