Mathematically, what is the total (or net) effects of an increase of the wealth of households on

Y? However, we now assume thatthe central bank controls the nominal interest rate.

(Hint: Totally differentiate IS and LM equations. SetdX=0 ifX is not{Y,A,M} Rearrange to get dY/dA )

Select one:

a. dY/dA=1CYCA

b. dY/dA=1CY(Cr+Ir)YV(i)V(i)1

c. dY/dA=1CY+YV(i)V(i)1

d. dY/dA=1CY+YV(i)V(i)CA