The formula for the is curve can be derived from the formula Y = [CO+MPC(Y-T)]+1+G. When the IS curve is derived, I and G are assumed constant and Y varies based on the interest rate r. Assuming that CO=50B, MPC = 80, T=200B, I = 120B-10B (r), and G = 250B, the derived IS curve is (A),Y=1,300B - 50B (r) B ) Y=1, 400B +40B (r) C) Y=1, 300B +50B (r) D) Y=1, 400B - 50B (r) Using the IS formula you calculated in the problem above, what is the value of Y if r = 10(10%) ? A) 1,000B B) 900B C) 800B D) 700B Using the IS formula that you derived above, what is the value of Y ifr = 12 (12%) ? A) 1,000B B) 900B C) 800B D) 700B Assume that the ,M,d money demand function is (=Y-50r, where is the interest rate. The money supply M is 2,000B and the price level P is 4. Use this information to derive the LM curve function/formula. The LM function/formula is A ) Y=650B + 50B (r) B) Y = 650B +40B (r) C) Y = 500B-60B (r) D) Y = 500B + 50B (r) D) 50. ၁ The formula for the IS curve can be derived from the formula Y = [Co+ MPC(Y-T)]+1+G. When the IS curve is derived, T and G are assumed constant and Y varies based on the interest rate r. Assuming that Co=50B, MPC = .80, T=2008, 1= 120B-108(r), and G-2508, the derived IS curve is c) D) 51. A) Y=1,300B-SOB(r) Y=1,400B+40B(r) Y = 1,300B +50B(r) Y=1,400B-50B(r) Using the IS formula you calculated in the problem above, what is the value of Y if r = 10 (10%)? 1,000B 900B 800B 700B Using the IS formula that you derived above, what is the value of Y if r = 12 (12%)? 52. A) 1,000B 900B 800B D) 53. 700B Assume that the money demand function is (M/P) =Y-50r, where r is the interest rate. The money supply M is 2,000B and the price level P is 4. Use this information to derive the LM curve function/formula. The LM function/formula is Y=650B +50B(r) A) B) Y = 650B + 408(r) c) Y=5008-608(r) D) Y = 5008 +508(r)

Consider a bond without an expiration date that makes a fixed interest payment of $210 per year. Complete the following table by calculating the interest rate on the bond at different sale prices. (Hint: The effective interest rate on a bond is a ratio of the interest payment to the sale price of the bond times 100.) Price of Bond Interest Rate (Dollars) (Percent) 1,200   1,000   750   600     Use the blue points (circle symbol) and the preceding table to plot the relationship between bond prices and interest rates on the following graph. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.   The line showing the relationship between bond prices and interest rates has a _____(POSITIVE/NEGATIVE)   slope; in other words, there is  _______(INVERSE / A DIRECT)  relationship between bond prices and interest rates.   NOTE- THIS QUESTION IS DIVIDED INTO SUBPARTS . PLEASE ANSWER…

Compute the two-year nominal interest rate (12) using the exact formula and the approximation formula for each set of assumptions listed in the following tables. The assumptions are in each table's first three columns: they give values for the current one-year interest rate (it), next year's expected one-year interest rate (i+1), and the term premium on a two-year bond (x). Enter your response for the approximate rate as calculated; for the exact rate, round your response to three decimal places. Term Premium 0% 1₁t 2% 1₁t+1 3% Exact int % Approx. 12t %

Jane, who works for the economic research department in a multinational corporation, is preparing a report for the advisory board of the company. The report intends to clarify in which country they should invest given the expected change in demand. The objective is, of course, to identify the country with greater change in demand. Jane analyzes countries A and B that currently have the same demand. She calculates the partial derivatives of demand with respect to income and finds that for country A it is greater than for country B. Demand in country A is measured in pounds and in country B in Kg. Can we conclude that if the only change expected in both countries is a change in income of 3.5%, then the company should invest in country A? no, we should calculate instead the income elasticity for the consumption of the good the company sells in each country. There is no statistic that can illuminate the advisory board on this problem. yes, because the derivative tells us that for each…