Practice Exam Exercises for Chapter 5 key

# Practice Exam Exercises for Chapter 5 key - b) The results...

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BEcon 301 Practice Exercises for Chapter 5 – Answer key 1. decrease; decrease; 2. increase; decrease; 3. increase; can’t tell exactly; 4. increase; increase; 5. decrease; decrease; 6. false; 7. true; 8. i IS When the Fed sells government bonds it decreases the money supply. LM’ LM curve will shift up. LM The IS curve will not be impacted. Y 9. a) IS relation: Y = 78 – 200i LM relation: i = Y/400 – 0.16 Y = 73.3 and i = 2.3%
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Unformatted text preview: b) The results will depend on your assumptions. For guide look at the notes form Chapter 5 handed out on 04/22/09. 10. a) IS relation: Y = 84.9 – 188.6i LM relation: i = Y/400 – 0.16 or i = 0.0025Y – 0.16 Y = 78.6 and i = 0.0365 or 3.65% b) The results will depend on your assumptions. For guide look at the notes form Chapter 5 handed out in class....
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## This note was uploaded on 12/22/2011 for the course MACROECON 301 taught by Professor Christinanagy during the Fall '09 term at University of Washington.

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