(a)Draw a figure,using the Keynesian IS-LM framework,of an economy in recession.
(b)If the Fed's goal is to move output to its full-employment level,what should it do with monetary policy? What will happen to the real interest rate? What is the effect on the price level? Show the result in your diagram.
(c)Suppose the Fed decides to keep the money supply unchanged.How could the government use fiscal policy to move the economy to full employment? Show the result in your diagram.
(d)How does the real interest rate differ between parts (b)and (c)?

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The Answer of (a)Draw a figure,using the Keynesian IS-LM framework,of an economy in recession.
(b)If the Fed's goal is to move output to its full-employment level,what should it do with monetary policy? What will happen to the real interest rate? What is the effect on the price level? Show the result in your diagram.
(c)Suppose the Fed decides to keep the money supply unchanged.How could the government use fiscal policy to move the economy to full employment? Show the result in your diagram.
(d)How does the real interest rate differ between parts (b)and (c)?

(A)Draw a Figure,using the Keynesian IS-LM Framework,of an Economy in Recession