problem set 11-4.soru - Question(4 Use the IS-LM model to determine the effects of each of the following on the general equilibrium values of the real

problem set 11-4.soru - Question(4 Use the IS-LM model to...

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Question (4)Use the IS-LM model to determine the effects of each of the following on the general equilibrium values of the real wage, employment, output, real interest rate, consumption, investment, and price level.(a)A reduction in the effective tax rate on capital increases desired investment.(b)The expected rate of inflation rises.(c)An influx of working-age immigrants increases labor supply (ignore any other possible effects of increased population).(d)The introduction of automatic teller machines reduces the demand for money. Answer (see next page)
4.

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