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i need help with this question asap, thank you 5 PDII'IIS have MSW {25 points} Assume that an economy is described by the IS curve

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i need help with this question asap, thank you

image text in transcribed
5 PDII'IIS have MSW {25 points} Assume that an economy is described by the IS curve y: 3500 + 36 2 T_ 150; and the LM curve y: 2E + 100!" The investment function for p this economy is .l= 1,000 _ 50;: The consumption function is C: 200 + 3(Y T). Long-run equlibrium for this economy is 4,000. The price level is 1.0 and 3 M= 1,200- a) (10 points) Assume that goverbment spending is fixed at 1,200. The government wants to achieve a level of investment equal to 900 and also achieve Y = 4,000. What level of r is needed for | = 900? What levels of T and M must be set to achive the two goals? b} (10 points) Now, assume thatthe government want to cut taxes to 1.000. With G set at 1200, what will the interest rate be at Y = 4,000? What must be the value of M? What will investiment be? c) {5 points} which set of policies (compare policy in part (a) and in part [tn] may be referred to as tight scal. loose money? which set of policies may be referred to as loose scal, tight money? Which "policy mix\" most encourages investment

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