I need help with the last part of this questions with the new curve etc
I need help with the last part of this questions with the new curve etc A=...
NEED HELP WITH QUESTIONS E TO I Consider a hypothetical economy characterized by the following equations(all variables as defined in class). Consumption: C = 700 + 0.95Y Investment: I=500− 30i Government spending: G=50 Money demand: L(i,Y )=0.75Y − 30i Money supply: Ms/P=400 (a) What is the equation of the IS curve? (b) What is the equation for the LM curve? (c) Solve for the equilibrium values of income (Y) and interest rates (i). (d) Assume that the government engages in...
Just e) f) and g) if possible please Question 5: The IS-LM model Consider the following IS-LM model: Consumption: C = 200 +0.25YD Investment: I=150 + 0.25Y - 10001 Government spending: G=250 Taxes: T=200 Money demand: L(i,Y)-2Y - 8000 Money supply: Ms /P=1600 (a) Derive the equation for the IS curve. (Hint: You want an equation with Y on the lefthand side and all else on the right) (b) Derive the equation for the LM curve. (Hint: It will be...
4. Consider the following numerical example of the IS-LM model C 0.8(Y T); I 1520 240i; T 150 0.25Y; G 200; (M/P)s 1800 (M/P)D 300 0.75Y 300i a. Derive the IS and LM relation. (10%) b. Solove for the equilibrium values of output, interest rate, disposable income.(10%) 400 and T becomes T 350 0.25Y c. Suppose that G rises by 200 to G = Simultaneously, the central bank decreases money supply to 1500. Calculate what will happen to Y* and...
Question #4: IS-LM Model: Change in Fiscal Policy (a) Suppose Congress had announced that they were going to increase government spending to G = 400. Assume that (M/P)Sreturns to 1600. Now the set of equations are the following: C = 200 + 0.25YDI = 150 + 0.25Y –1000i T = 200 G = 400(M/P)S= 1600(M/P)d= 2Y –8000i Calculate the new level of equilibrium interest rate (i) and equilibrium output (Y).(b) Calculate the new levels of consumption (C) and investment (I)...
Consider the following economy: Y = AK0.5N0.5 A = 1 K = 100 N = 100 T = 15 G = 15 C = 10 = 0.5(Y-T) - 0.5r I = 25-2r L = 50 + 0.5y - 10r M = 225 Pie = 0 1. Derive the equation for the IS curve 2. Derive the equation for the LM curve 3. General equilibrium values of output, real interest rate, and price level 4. G increases by 6 to 21,...
B2. Closed Economy IS-LM-FE model: The behaviour of households and firms in a closed economy is represented by the following equations Desired consumptionC 200+0.8(Y-T-500r Desired investment : r = 200-500r Real money demand where expected inflation is ㎡-0.10 and taxes depend on income according to T 20+0.25Y. (a) Derive an expression for the IS curve with the real interest rate on the left side of the equation. How does the position of the IS curve depend on G? (b) If...
Advanced Macroeconoics II (41-434) Assignment 1 1. Consider the following IS/LM Model discussed in the class (IS) (LM) rn-p-y-Ai, λ > 0. where π' is a expected inflation, g is a government spending, and m is money supply, respec tively. It is assumed that price level is fixed as p-p A. Calculate the equilibriu interest rate and output level. B. Assume that g is constant. Calculate the effect of the change in the money supply on the equilibrium interest rate...
please help me Consider the following numerical example of the IS-LM model: C = 100 + 0.3YD I = 150 + 0.2Y - 1000i T = 100 G = 200 i = .01 (M/P)s = 1200 (M/P)d = 2Y - 4000i Find the equation for aggregate demand (Y). Derive the IS relation. Derive the LM relation if the central bank sets an interest rate of 1%. Solve for the equilibrium values of output, interest rate, C and I. Expansionary monetary...
1. Consider the following numerical example of the IS-LM model: C = 100 + 0.3YD I = 150 + 0.2Y - 1000i T = 100 G = 200 i = .01 (M/P)s = 1200 (M/P)d = 2Y - 4000i a. Find the equation for aggregate demand (Y). b. Derive the IS relation. c. Derive the LM relation if the central bank sets an interest rate of 1%. d. Solve for the equilibrium values of output, interest rate, C and I....
Assume the Chilean economy can be described as follows: C=200+0.25Yd l=150+0.25Y-1000r G=250 T=200 (M/P)d= L(r, Y) = 2Y- 8000r Ms=1840 P=1 a) Derive the equation for the LM curve. ( 1 .5 mk) b) Determine the slope af the LM curve. (0.5 mark) c) Derive the equation for the IS curve (I.S mk) d) Determine the slope ofthe IS curve. (0.5 mk) c) Compute the quilibrium values of income (Y) and interest rate (R)? (2 marks) [) Calculate the value...