ECON341

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IS Curve: y = 4(150 150i)

LM Curve: i = -0.5 + 0.001y
y = 562.5, i = 6.25%
When G increases to 140, new y = 662.5, new i = 16.25%
When T decreases by 100, new Y = 691, new i = 19.1%
When E increases to 2.2, new y = 552.5, new i = 5.25%
(i) vertical (ii) undefined (iii) new y = 500, new i = 16.67%
When G increases by 40 y stays at 500 and I = 43.3% ( NOT SURE ABOUT THIS )
I = 0 , y = 600 ( not sure )
(i) horizontal (iii) fiscal