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 9 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 the LM curve is: Y-12.5xr=O .Y-r-200=O r = 200 Y- 12.5xr-200=O E. The LM curve does not exist