" Ob AD-AS oltey issue Corset AD=AS peti ae Considocthe Btlowing vbiliy Aunetrents ves. U= Lege +4 leg (th) —d(Q, A 'FO A" >0. The budget constocana is) K +WL+h = pox My whwce A=PY~WL Now the \pcedoctren Que 1, N=F(D, a, 0,Fi thock of Menry - LM) > gddctronad Meney one Wants , mee PY= A+ WL pha budgel Comstocamd © Combe Worthen Ob, PRFUSAN =Pe4nM, Now We considox the Ss Wei no ANesttony, | DDetive the, Consumption Function . | Fast We consider o ete Lagpra naj 5 Method Bac constrained oti LY Mawinmndza- | Hon,z= Lloge +4 leg (Me) dL) VAP PFOD +8 ~ Po] ots eee — dp=0 SS — d= AP ----.- ©. Bee gy OPR- A © | dz 2 a4 RPFL =O. | et > ppp d'(D----- @ A. = >i =p 7 N---@ % PPR = MD HP AQ -.-O Nove We Gonsidee hak Money Mercketclean ond MoM . Thoaloce, GIYG) con be woul oe ee Heseze ©) gives the consumpiton spunckten . wy Dewe the AS cowe. Awe Now we dade Ane NS crow-<, Casidocan_ newareIn_ P. 9° Boum, We cansay thot \_ suises owd hence N sds.ca, So as Podses NMPL (PR) Treaares g To maintam chhmality Conditron, MPL has to Malt and roxginall desl Ay ® woode hap to Scise, Bot: Seequizee Sase_ in, Land honwa_Y Scised Tu, the AScome. vs positnely stebed . Foun, @ ant © we ok.emahcally i Fi dl du(ddbe awe Th $5 a > PF dl yn db _F ? ap =diodt a = a — Fe 7 tf EPR - dy = isa = dal ae tee [2M So PRIUS PE: Sixee 40D 30, Xo. Neaoin, Y= FULD Tus We get: j |) |) sk 0). 1 AY Show Sra oAdY 2 A . a po pst ely a mony is potsal yous rests. and anturtrvely dvflan “Ryo tina We few inte bro Nsealand nonclogy holioy. Suppose Mak: Oc Sus-er> tenths AD epvieshifs saightrywod and the esonomy Proved along ths AS cuscre - | PP - KS GuPkee Pil Rot Di (Gy Do (bs) | ; Fee As Gc stises The S03 O\N ney Crees domed _| leads to Inccesse WO foace. This INT uoun | TNe oa ed GA Loyrronk ard output. Thus SL >0,. Baden hare ea ge ae oR | Yasin mu Hploc. Qinex Pstises, CPs, de dt ow Se ZO. Ln peo clo, $e -- Ede xo. Nowy N= Cte. Vener, dy - dae 4| abe ae ane ge. capasctrenate preswe3e TK P amd cheele Whethoe tt Ts Consistent with eavili baum, Sinew gee o, we have Bull \) je, Sse TAL) THE Bitews Rec trot Lo stised und hence AS Inoecares. Howenar, deal \ ne Steduees Consumbiren Qund hence AD. Thus What Ocows MM Oommodity Marked ie ences supply. | Cleosdly ao Pails to ems sco mae LO ono c avi bout Similarly OAd Pe nt! “OES consistent NITKMa@ee eacnow tne 7 |