Macroeconomics 5th Edition by Olivier Blanchard

Exercise 3

Using the IS-LM model, determine the impact on stock prices of each of the policy changes described in (a) through (c). If the effect is ambiguous, explain what additional information would be needed to reach a conclusion.
a. An unexpected expansionary monetary policy with no change in fiscal policy.
b. A fully expected expansionary monetary policy with no change in fiscal policy.
c. A fully expected expansionary monetary policy together with an unexpected expansionary fiscal policy.