1)Graphically show how you can derive the IS curve.
2)Graphically clearly show how an increase in autonomous saving will affect the IS curve.
3)Given the following commodity and money market models:
Y=C+I DMTP=15+2Y
C=20+1/2Y DMS=25-10r
I=40-10r MS=80
Ms=money supply
DMTP and DMS=Demand for Money
a)Derive the IS and LM functions.
b)In one sentence what does IS curve and LM function represent.
c)Find equilibrium income and market rate of interest.
d)Find the savings function.
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