Question
1.Suppose the demand for money is L = 0.20Y, the money supply is $200, C = $90 + 0.80Yd, Tx = $ 50, I =
1.Suppose the demand for money is L = 0.20Y, the money supply is $200, C = $90 + 0.80Yd, Tx = $ 50, I = $140 - 5i an G = $50
a)Derive the IS and the LM equation,
b)Find equilibrium output, the rate of interest and investment
c)Derive the IS equation when the government spending is increases by $20, ceteris paribus.
d)Find the output, rate of interest and investment when government spending is $70
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Economics Today The Macro View
Authors: Roger LeRoy Miller
19th Edition
0134478762, 978-0134478760
