Question
The macroeconomy for a closed economy (an economy without international trade) can be expressed by the following system of equations C=0.8Y+20 (consumption function) I=150-10r (investment
The macroeconomy for a closed economy (an economy without international trade) can be expressed by the following system of equations
C=0.8Y+20 (consumption function) I=150-10r (investment function) G=70 (government spending)
1Derive the IS curve, what is the slope? (Vertical axis is r) A. -50 B. 50 C. 1 D. -1 E. -1/50
2The government is cutting taxes. In which direction would this shift the IS curve? (Multiple choice) A. Inward B. Outward C. Upward D. Downward
Explanation plz
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Issues in Economics Today
Authors: Robert C. Guell
8th edition
1259746399, 1259746390, 978-1259746390
