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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,
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.
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