Question

Algebraic IS-LM problem , given these:

IS: I= 100-10i, S= -50+.25 YD, YD= Y-T, T=.2Y, G=50, Equilibrium condition IS: I+G=S+T

LM: Lt= .2y, La= 200-5i, M/P=200, Equilibrium condition LM: Lt+La=M/P

1. find equilibrium for IS curve (y=f(i), i=g(y))

2. find equilibrium for LM curve (y=f(i), i=g(y))

3. find equilibrium i, y

4. let the money supply increase by 50 (what happens to equilibrium y,i (multiplier))

5. let y increase by 20