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Consider an economy in which the consumption function is C = 76.6 + 0.7 * (Y -T).The investment function is: I = 201.7 -5.7r.The value
Consider an economy in which the consumption function is C = 76.6 + 0.7 * (Y -T).The investment function is: I = 201.7 -5.7r.The value of government purchase (G) and net tax (T) is also 165.7.This implies that the equation of the IS curve can be written in the form: Y = a-br where a and b are both constant parameters.Calculate parameter b.
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