Labor Market and Production:

Wage=100-N

Wage=25+2N

Y=A*K.5N.5

Goods Market:

C=70+2/3(Y-T)

I=100-400r

G=50

T=50

Asset Market:

MS=245/P

MD=1/2(Y)-100r

SR equilibrium:

IS = 485 - 1200r

LM = 490 + 200r

Suppose when the economy is in the Short Run equilibrium and the Government wanted to conduct a stabilization policy. What are the 3 policies they can do? How large would each policy have to be? Draw this graphically under the Keynesian assumptions. Include both the IS/LM/FE and the AD/AS models making sure to completely label the graphs.