Problem 2.1: What is the link between monetary policy and real variables? [Solution]

Problem 2.2: How does each of the variables in the output equation react to the a rise in the interest rate? [Solution]

Problem 2.3: What is the effect of expansionary monetary policy on the interest rate? [Solution]

Problem 2.4: What is the effect of expansionary fiscal policy on the interest rate? [Solution]

Problem 2.5: What is meant by the term "crowding out"? [Solution]