Suppose that the following equations describe an economy. (C, I, G, T, and Y are measured in billions of dollars, and r is measured as a percent; for example, r = 10 = 10%) C=170+0.6(Y-T)T=200I=100-4rG=350(M/P)^d=L=0.75Y-6r(M^s)/P=735a. Derive the equation for the IS curve (Hint: It is easier to solve for real output Y here)b. Derive the equation for the LM curve (Hint: Again, it is easier to solve for real outputY here)c. Now express both the IS and LM equations in terms of r. Draw both curves andcalculate their slopes.d. Use the equations from Parts a and b to calculate the equilibrium levels of real output Y,the interest rate r, planned investment I, and consumption C.e. At the equilibrium level of real output Y, calculate the value of the government budgetsurplus.f. Suppose that G increases by 36 to 386. Derive the new IS and LM equations and drawthese curves on the graph you drew for Part c.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more