Q10.....

1. Use the following version of the IS-LM model to answer all parts of this question. Endogenous Exogenous Consumption: C = 200 + .8*Yd Variables Variables Dispoable Income: Yd = Y - T Taxes T = 125 +.25*Y C, Yd, T, Y M, G, P, Yf Investment I = 200 - 20*r AD, I, r, NX (foreignY) Net Exports NX = 100 - .2*Y - 5*r+ .1Yf Md Aggregate Demand AD = C+I+ G + NX Goods Market Equilibrium Y = AD Money Demand Md = (.5Y - 50*r)*P Money Market Equilibrium Md = M Assume Y