## B2 First For First Year Law School Exams

Balance in economy will come at r * = 17,5 and Y * = 569, i.e. change of limit tendency to consumption towards reduction will cause decrease in an equilibrium interest rate by 12% and equilibrium output for 9,3%. This situation on graphics will look thus:

At reduction of the monetary offer by 80 units the equilibrium interest rate will be increased on 6, i.e. will increase by 30,6%, and the equilibrium output decreases that is explained by that the schedule of LM is displaced to the left, and crosses the schedule of IS closer by the beginning of coordinates.

The increase in the maximum demand for money from assets besides will strongly reduce value of equilibrium output (on 363 or by 240%). At not changed MRS value of equilibrium output also strongly decrease (by 340 units or for 221%), and growth rates of an interest rate are equal 61% or 12 units whereas at the reduced value of MRS it increased by 56,7% or for 11,1 units.