Question

supposed investment spending is less interest sensitive, with the investment equation now presented as I=$120-3i instead of I=150-6i. The K equation would then be
y=$1100-15i instead of $1250-30i. We shal assume that the nominal money supply remains at $150 and the deman for money is 0.20y-4i
a. find simultaneous equilibrium for the money and goods market when the price level is 1.00 1.20 1.50
b.plot the relationship of real output and the price level and label the schedule AD'

Answer 1

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