Consider an economy described by the following C 4 trillion I 1 5 trillion G 3 0 trillion T 3 0 trillion NX 1 0 trillion f 0 mpc 0 8 d 0 35 x 0 15 0 5 r 2 a Derive expressions for the MP curve and AD curve b Calculate the real interest rate and aggregate output when 2 and 4 c Draw a graph of the MP...

a The MP curve is given as r 2 05 The AD cur ...

Consider an economy described by the following: C = 4 trillion I = 1.5 trillion G

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Consider an economy described by the following:

C̅ = 4 trillion

I̅ = 1.5 trillion

G̅ = 3.0 trillion

T̅ = 3.0 trillion

N̅X̅ = 1.0 trillion

f̅ = 0

mpc = 0.8

d = 0.35

x = 0.15

λ = 0.5

r̅ = 2

a. Derive expressions for the MP curve and AD curve.

b. Calculate the real interest rate and aggregate output when π = 2 and π = 4.

c. Draw a graph of the MP curve and AD curve, indicating the points in part (b) above.

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The Economics of Money Banking and Financial Markets

ISBN: 978-0321785701

5th Canadian edition

Authors: Frederic S. Mishkin, Apostolos Serletis

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Question Posted: Nov 09, 2018 12:39 PM

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Consider an economy described by the following: C = 4 trillion I = 1.5 trillion G

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