Question
Assuming that the following are given: Sa = -860; mps = 0.25; I =780+0.2Y -1500i ; G =450; Ta =150; M/Pd = 5Y -5000i and
Assuming that the following are given: Sa = -860; mps = 0.25; I =780+0.2Y -1500i ; G =450; Ta =150; M/Pd = 5Y -5000i and M/Ps = 6,259.
A. formulate the IS function
B. formulate the LM function
C. derive the equilibrium real output and the equilibrium real level of interest rate. Show the Computations.
D. prove that IS and LM are equal at the value derived in letter c. show the computation.
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Issues in Economics Today
Authors: Robert C. Guell
8th edition
1259746399, 1259746390, 978-1259746390
