the impact of a rise in Money Supply on the economy in SR and in LR.

Econ 302; Dr. Janko
Participation Worksheet
Due Sunday May 10th by 10pm.
1. For each of the figures below provide an example of what could cause the curve to shift either out or in. In
each case, provide a unique factor; i.e. do not say “rise in X” causes IS to shift out, and “fall in X” causes it
to shift in. Come up with a different factor other than X that will cause IS to shift in.
Figure 1: ___________________________
Figure 2: ___________________________
Figure 3: ___________________________
Figure 4: ___________________________
2. The AD curve is derived using the IS-LM model by considering the impact of _______________ on the
IS-LM diagram (I.e. impact on Y specifically).
3. True/False: Any shift in the IS curve outwards, will also shift the AD curve outwards.
4. True/False: While change in P causes a shift in the IS-LM diagram, it causes a movement in the AD-AS
diagram.
5. True/False: The LRAS gives the full-employment level of output.
Econ 302; Dr. Janko
6. Discuss the impact of a rise in Money Supply on the economy in SR and in LR. Draw the IS-LM diagram
as well as the AD-AS diagram. Provide intuition for SR and LR. Elaborate on your answer using your
own words [do not just copy the answer from the class notes/videos/etc]. Provide your answer below.
7. Redo the numerical problem done in Video 26. Derive the IS, LM, and AD. Also solve for equilibrium r*,
Y*, C*, I*, and real money demand. Provide your answer below.