C = 120 + 0.8 x (Y T)

C = 120+0.8 x (Y -T) T = 400 I = I(r) -50-5 xr G = 400 M = 2, OOO =2xY-25xr Question 8 e Consumption function Taxes e Investment function e Government purchases e Money supply e Price level e Demand for real money balances From the above list, the resulting equation of the IS curve is: B. 25 x Y + = 1,250 c. Y = 1,250 D. Y +25 x r = 1,250 E. Not enough information is supplied to provide an answer