14. *

(a) For the economy with the following specifications:

Consumption C = 100 + 0.9Y d

Income tax t = (1/3)Y Investment I = 600 – 30i Government expenditure G = 300 Transaction demand for money M

1 = 0.4Y Speculative demand for money M

2 = – 50i Nominal money supply M = 1040 Price level P = 2 Full employment level of income

= 2500

[where, Y