2. The following equations describė an ecoHomy Income identity: Y = C+1+G+ NX Consumption function: C= 80 + 0.63Y Investment function: |= 750 - 2,000r Government spending: G- 750 Net export function: NX = 425 - 0.1Y - 500r Tax rate: t = 0.3 Money demand function: M = (0.1625Y - 1,000r)P Money supply: M = 600 Price level: P= 1 where Y is output, C is consumption, I is investment, G is government purchases, NX is net exports, M in the first equation is money demand and money supply in the second equation, Pis the price level and r is the real interest rate. C= a+ b(1-t)Y. Show all work for the following questions in a neat and orderly manner. Credit will not be given for unsupported work, such as only an answer. 1. What is the equation that describes the IS curve? 2. What is the equation that describes the LM curve? 3 What are the equilibrium level of income and interest rate? the domand for

2. The following equations describė an ecoHomy Income identity: Y = C+1+G+ NX Consumption function: C= 80 + 0.63Y Investment function: |= 750 - 2,000r Government spending: G- 750 Net export function: NX = 425 - 0.1Y - 500r Tax rate: t = 0.3 Money demand function: M = (0.1625Y - 1,000r)P Money supply: M = 600 Price level: P= 1 where Y is output, C is consumption, I is investment, G is government purchases, NX is net exports, M in the first equation is money demand and money supply in the second equation, Pis the price level and r is the real interest rate. C= a+ b(1-t)Y. Show all work for the following questions in a neat and orderly manner. Credit will not be given for unsupported work, such as only an answer. 1. What is the equation that describes the IS curve? 2. What is the equation that describes the LM curve? 3 What are the equilibrium level of income and interest rate? the domand for

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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