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Bummerland finds itself in a major depression. Wages are rigid-downward in Bummerland, so there is no automatic process by which the economy can recovery on its own. Here are some important facts about Bummerland you'll need: (1) the marginal propensity to consume is .75 and the "marginal propensity to hold money" (k) is .2; (2) the required reserve ratio against demand deposits is .10. The appropriate definition of money in Bummerland is M1, defined in Bummerland as currency + demand deposits Bummerland's bank deposits consist only of demand deposits). The Bummerbank and the Treasury have agreed to coordinated policy and have narrowed the choices down to four: (1) a $100 billion increase in government expenditure, half of the funds raised from taxing the public and the other half from bond sales to the public; (2) a $100 billion open market operations purchase of government securities; (3) a $100 billion decrease in taxes, financed by issuing the monetary base; (4) a $100 billion increase in government expenditure, financed by increasing sales of bonds to the public. QUESTIONS: 1. Describe in general terms (with IS,LM diagrams) the effects that each of these policies would have on Bummerland. 2. What is the change in MI in each of these four cases