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Consumption Function: C t = 17.2 + 0.7(Yd) t Investment Function: I t = 24 -100r t Real Demand for Money: L t = 6Y
Consumption Function: Ct= 17.2 + 0.7(Yd)t
Investment Function: It= 24 -100rt
Real Demand for Money: Lt= 6Yt-1400r
Net Exports Schedule: NXt= 8 - 4et
Government Spending: G0= 36
Tax Collections: T0= 36
World Interest Rate: r0= 0.15
Price Level: P0= 4
Domestic Money Supply: M0= 2520
Assume further that the economy is currently at the long-run equilibrium.
Graph the situation of this economy in the IS-LM and IS*-LM* diagrams
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