What is the equation for the IS curve?
For unlimited access to Homework Help, a Homework+ subscription is required.
C = 1275 + 0.5(Y-T) Ć¢ĀĀ 200r
I = 900 Ć¢ĀĀ 200r
Real Money demand, L = 0.5Y Ć¢ĀĀ 200i
Expected inflation, ? = 0
Full employment output, = 4600
a.) Suppose that T = G = 450 and M = 9000
Find an equation describing the IS curve
Find an equation describing the LM curve
Find an equation for the aggregate demand curve (Hint: Use IS and LM equations to find a relationship between Y and P)
What are the general equilibrium values of output, consumption, investment, real interest rate, and price level?
b) Suppose M = 4500, T and G remain the same.
What is the equation for the aggregate demand curve?
c.) Suppose T = G = 330 and M = 9000
What is the consumer equilibrium equation according to the indifference curve analysis?
Ā
The utility that Mary receives by consuming food F and clothing C is given by u(F, C)=F2C
Denote the by Pf the price of food, by Pc the price of clothing, and by I Mary's income.
a) What are the marginal utilities of food and clothing for Mary?
b) What are the optimality conditions for Mary, that is, what are the conditions a utility-maximizing market basket must satisfy?
c) What is the equation for Mary's price consumption curve for a variable price of food? Graph it.
d) What is Mary's food demand function? Graph it.
e) What is the equation for Mary's income-consumption curve? Graph it.
f) What is the equation for Mary's Engel curve for food? Graph it.
g) Is food a normal or inferior good?