macro soln
DESCRIPTION
IS LM solnTRANSCRIPT
![Page 1: Macro Soln](https://reader036.vdocuments.mx/reader036/viewer/2022083018/577c77461a28abe0548b70b9/html5/thumbnails/1.jpg)
1a)
X Axis i
Y Axis Y
Upward Sloping LM, Downward Sloping IS
When people become wealthier, their income is more, so the AD will rise & Y will eventually rise So, the IS curve will shift rightward (blue line). I will increase.
1b) C will increase, I will decrease, un employment will rise
![Page 2: Macro Soln](https://reader036.vdocuments.mx/reader036/viewer/2022083018/577c77461a28abe0548b70b9/html5/thumbnails/2.jpg)
2a)
X Axis i
Y Axis Y
Upward Sloping LM, Downward Sloping IS.
Demand for money will rise, so i will increase & Y will decrease. LM curve shifts upward (green line)
2b) I will decrease, unemployment will rise & C will remain unchanged.