(1) Identify and discuse the IS-LM framework (determination ofincome and the interest rate) and equivalent AD-AS framework.(determination of price level and income) and how changes inequilibrium occur as a result of changes in fiscal and moneypolicy.
IS-LM framework
(1) Identify and iscus the IS-LM Framework(determination of income and the interest rate) and the equivalentAD-AS Framework (determination of price level and income) and howchanges in equilibrium occur as a result of changes in fiscal andmonetary policy.
Real Stock/Real Interest
Given data on the nominal money supply, nominal interestrates, the consumer price index, and inflation rates, compute thecurrent real stock of money in the US and real interestrates.