' or ECON 206: Macroeconomic The y QUIZ: 20 points low 7 ' t ut) in the SHORT RUN ' 1. According to Keynes, What determines total income (the value of tOtal on P (2 points) 2. Finish the following sentence: (4 points) (a) The IS curve shows the combination of .............. and ........................... that results in the ......... market. (b) The LM curve shows the combination of .............. and ........................... that results in the ......... 1 market. ' 3- Use the IS- LM framework to show the impact of a. stock market crash on output (demand for goods and services) and the interest rate. Then explain in words, explain the mechanism. In other words, explain how the crash leads to changes in output and the interest rate. Please, Stick '60 What we discuss in class. (4 points) The following equations describe an economy: Y=C+I+G C:200+0.75(YT) I: ZOO257' d (11734) = L(T, Y) = Y 10qu 1. Use the relevant set of equatious to derive the IS curve (express Y as a function of r, G, T and some parameters) (3 points) 2. Use the relevant set of equations to derive the LM curve (express Y as a function of 'r, M, P and some parameters) (3 points) 3. Derive the aggregate demand curve (express Y as a function of P, G, M, T not 1" and some parameters) (2 points)