Question
Consider an economy in which the price level is equal to one unit and the goods and money market are described by the following equations:
Consider an economy in which the price level is equal to one unit and the goods and money market are described by the following equations:
- consumption:C = 400 + 0.2(Y-T)
- investment:I = 80 + 0.5Y -10r
- G=T= 100
- Money Demand:Md = 100 + Y - 50r
- Money supply:Ms = 100
Find the equilibrium income Y?
- A.1100
- B.1130
- C.1120
- D.1000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
International Economics
Authors: Robert C. Feenstra, Alan M. Taylor
3rd edition
978-1429278515, 142927851X, 978-1319029517, 1319029515, 978-1429278447
