QUESTION:

Use the IS-LM-FE model to analyze the effect of this pandemic situation. Assume before pandemic, economy was in general equilibrium. (consider one at a time, separate graph for each)

a)Due to lockdown, demand for labor and supply of labor both reduces.

b)Government expenditure increases

c)Private Consumption on durable and non-durable greatly reduces

d)Rate of return on non-monetary assets reduces.