Question
Assume that we have the following data: C=100+0.50Y I p =100-20r M t =0.10Y M s =100-10r M=80 a. Build the IS-LM function. b. If
Assume that we have the following data:
C=100+0.50Y
Ip=100-20r
Mt=0.10Y
Ms=100-10r
M=80
a. Build the IS-LM function.
b. If we assume an increase in Investments by 100 units, please calculate again the IS-LM functions.
c. The intersection of IS-LM functions defines four areas. Analyze the behavior of the markets for goods and money for each area.
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Principles of Finance
Authors: Scott Besley, Eugene F. Brigham
5th edition
1111527369, 978-1111527365
