A large open economy is given as follows: cd-200+0.5(Y-T)-300r d-200-200r G=150 T=200 NX=200-0.05Y-600r L(Y, r)=0.75Y-300r Money supply M is 1000 and P=2. Answer the following questions a). What is the IS curve? b). What is the LM curve? c). What are the equilibrium interest rate r and national income Y?

A large open economy is given as follows: cd-200+0.5(Y-T)-300r d-200-200r G=150 T=200 NX=200-0.05Y-600r L(Y, r)=0.75Y-300r Money supply M is 1000 and P=2. Answer the following questions a). What is the IS curve? b). What is the LM curve? c). What are the equilibrium interest rate r and national income Y?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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