Iowa State University

Department of Economics

Intermediate Macro

Fall 2006 Problem Set #3 Alexander


 

This problem set is due on Thursday, November 9 th.

For each of the following cases, explain the effect of the policy change on Y, i, L, C, I, NX, and e. Indicate whether the policy will cause an increase (+), a decrease (-), or no change (0) in those variables.

I am looking for a description of the effect of the policy, as well as 6 diagrams (IS/LM/BP, money market, consumption, investment demand, Net Exports, and the foreign exchange market) for each of the cases below.

Y
i
L
C
I
NX
e

Fixed, Mobile, decrease in t

 

 

 

 

 

 

 

Fixed, Mobile, decrease in M

 

 

 

 

 

 

 

 

Flexible, Mobile, decrease in TR

 

 

 

 

 

 

 

Flexible, Mobile, decrease in M

 

 

 

 

 

 

 

 

Fixed, Immobile, decrease in G

 

 

 

 

 

 

 

Fixed Immobile, decrease in M

 

 

 

 

 

 

 

 

Flexible, Immobile, decrease in t

 

 

 

 

 

 

 

Flexible, Immobile, decrease in M