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Economics Assume that the consumption function is given by C = 100 + 0.6 (Y - T), and the investment function is / = 1,000
Economics Assume that the consumption function is given by C = 100 + 0.6 (Y - T), and the investment function is / = 1,000 - 200r. where r is measured in percent, G equals 300, and T equals 200. a. What is the numerical formula for the IS curve? Express the equation two ways: (1) Y as a function of r: (2) r as a function of Y. b. What is the slope of the IS curve? c If r is 1 percent, what is /? What is Y? If r is 3 percent, what is I? What is Y? If r is 5 percent, what is P? What is Y? d. If G increases, does the IS curve shift upward and to the right or downward and to the left? e. Calculate the government purchase multiplier and the tax multiplier
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