Question 2 1.In the state of Happyland, the government is implementing a lump-sum taxincrease policy. Within the Mundell-Fleming open economy macro model(IS-LM-BP) based on fairly high, but imperfect capital mobility and flexibleexchange rates analyze, clearly state and illustrate graphically the effects ofthis policy on the economy's aggregate income (Y), interest rate (r) and theexchange rates (T).Be sure to properly label all parts of your diagram. Also clearly show all shiftsand explain why everything happens. Further, both the initial and newequilibrium positions including the corresponding levels of the variablesmentioned above are to be clearly demonstrated.Within the Keynesian IS-LM and Yd-Ys framework for a closed economywith a flexible price level and a rigid money (nominal) wage clearly state,analyze and illustrate graphically the effects of a contractionary monetarypolicy implemented by the Fed. Include in your answer the effects of this20 policy intervention on aggregate income (Y), interest rate (r), price level (P),employment (N), nominal wage (W), and the real wage (W/P):Chairt ChBe sure to properly label all parts of your diagrams. Also, clearly show allshifts and explain why everything happens. Further, both the initial and newequilibrium positions including the corresponding levels of theaforementioned variables are to be clearly demonstrated.en2.

The IS-LM model is described as a situation where the product market and the "money market" hold…

Within the Keynesian IS-LM and Yd-Ys framework for a closed economy with a flexible price level and a rigid money (nominal) wage clearly state, analyze and illustrate graphically the effects of a contractionary monetary policy implemented by the Fed. Include in your answer the effects of this policy intervention on aggregate income (Y), interest rate (r), price level (P), employment (N), nominal wage (W), and the real wage (W/P). Be sure to properly label all parts of your diagrams. Also, clearly show all shifts and explain why everything happens. Further, both the initial and new equilibrium positions including the corresponding levels of the aforementioned variables are to be clearly demonstrated. 2.

Within the Keynesian IS-LM and Yd-Ys framework for a closed economy with a flexible price level and a rigid money (nominal) wage clearly state, analyze and illustrate graphically the effects of a contractionary monetary policy implemented by the Fed. Include in your answer the effects of this policy intervention on aggregate income (Y), interest rate (r), price level (P), employment (N), nominal wage (W), and the real wage (W/P). Be sure to properly label all parts of your diagrams. Also, clearly show all shifts and explain why everything happens. Further, both the initial and new equilibrium positions including the corresponding levels of the aforementioned variables are to be clearly demonstrated. 2.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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