Posted: December 29th, 2014

IS-LM model

IS-LM model

Order Description

Use a single Powerpoint slide to build a standard IS-LM diagram. Use textboxes to label the axes and all the essential curves, and key points such as Ye equilibrium

income.

Your Assignment Task:
Use a single Powerpoint slide to build a standard IS-LM diagram. Use textboxes to label the axes and all the essential curves, and key points like Ye, equilibrium

income. Once you’ve built a reasonably good looking diagram, copy it onto three additional slides (easiest way is to just copy the entire slide three times). Answer

each question on each page. Keep one as a reserve, and carry out the three following tasks, one on each slide:
1.    i)  In response to the Heisei Recession that began in 1992, the Japanese Government and the Bank of Japan (the central bank) carried out the standard ‘policy

mix’ to revive the economy and raise GDP. Over this period interest rates fell to nearly zero. Using at least three pairs of curves, show this policy mix in your first

IS-LM diagram.
2.    ii)  By the year 2000, interest rates were very low but the Japanese economy was still in recession. The Bank of Japan undertook large increases in the Money

Supply, yet GDP remained unchanged. In your second Powerpoint slide, carefully draw the IS-LM curves as assumed by the school of economics which would predict this

outcome. Name that school of economics in a textbox.
3.    iii)  The British Government for the last three years has been reducing government spending, but has argued that this will have no effect on Nritish GDP. Draw

the IS and LM curves in your third diagram that would fit this prediction.
Importantly, in constructing the Powerpoint slides, try to animate the curves and text boxes, so that they all move in the correct sequence. If you are unsure how to

do this, ask online. Make sure the curve and related textboxes move together .
Don’t try to search online for answers to these questions. Anything you find online is likely to have been built using different assumptions for their model, and would

lead to the wrong answers here.
Be aware that it may also be entered into Turnitin for inspection.

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