UCB Impact of Rise in M OR Rise in G in the IS LM Model Economics Questions

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Impact of rise in M OR rise in G in the IS-LM model

For this activity you are asked to discuss and show the impact of rise in money supply (done in Video 12) OR the impact of a rise in government expenditure (done in Video 13). Submit an image along with you discussion.

You can submit your notes after watching the video.

Make sure to do the following:

• Discuss the immediate impact (i.e. which curve shifts and why; what is the reasoning)
• Discuss the impact on r and Y
• Illustrate the impact on the IS-LM diagram
• Discuss the impact on C, G, I, and real money demand.

Time Diagrams: Impact of rise in G

The video lecture shows the impact of a rise in G on the economy, and uses the time diagram to illustrate the impact on Y and r over time. What is the impact on Price and Investment over time? Use the time diagram. Submit a photo of your work.

ACTIVITY: provide two time diagrams: for P and Investment.