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Question 5 (Lesson 10: The IS Curve! Table 1: Notation used in that Table matches the notation we used in the lectures Using the values
Question 5 (Lesson 10: The IS Curve! Table 1: \"Notation used in that Table matches the notation we used in the lectures\" Using the values in the table above, answer the following questions. (Show your work) (a) Derive the expression for the IS curve (i.e., Y =f(r)) (3 points) (b) If the real interest rate is 4%, what is the value of equilibrium real GDP (Y)? (2 points) (c) If the real interest rate equals 4%, calculate equilibrium values for the following: (6 points) 1'. Consumption (C) = ii. Investment (1) = iii. Net Exports (NX) = (d) Use the values in (0) above to conrm that the goods market is in equilibrium (hint: Goods market equilibrium: Y = C + I + G + NX) (2 points)
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