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.
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Y |
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L |
C |
I |
NX |
e |
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Fixed, |
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Fixed, Mobile, decrease in M |
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Flexible, |
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Flexible, Mobile, decrease in M |
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Fixed, Immobile, decrease in G |
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Fixed Immobile, decrease in M |
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Flexible, Immobile, decrease in t |
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Flexible, Immobile, decrease in M |
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Fixed Mobile , decrease in t:
