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Graphically show in the five-part graph the effects of an increase in  (IS shock). (Use Desmos to answer this question.)

A computer with Microsoft Word 2019 installed on it is needed to complete the assignments for this course.

Graphically show the Money Market Equilibrium relationship (a line) between and . Explain the intuition of the sign of the slope of the Money Market Equilibrium relationship. (Use Desmos to answer this question.)

Algebraically solve for an expression for the AD curve. (Write  as a function of , take .)

Which of the following is true of the Output Gap? (Select all possible answers.)

Describe in both words and the NK IS-LM-AD-AS graph as above how Fed Lending/Liquidity Provision help to move the economy out of Stage 3. (Use Desmos to answer this question.)

Which equations above are summarized by the IS curve?  (Select all that apply – use the number of the equation.)

Use your previous work to derive the expression for how , , and  are impacted by changes in

Money in a Partial Sticky Price Model (20 Points) For questions 4a-e below, use the following details: Suppose we have an economy with no investment today and no production tomorrow. Output is produced using labor only. The price level is partially sticky. Assume the following specific functional forms for the relevant equations:

Money in the Neoclassical Model (20 Points) For questions 3a-d below, use the following details: Consider the neoclassical model as augmented to include money in households’ utility function, as presented in class. The equations characterizing the equilibrium of the model are: