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20 Nov 2019
C = 2180 â 20r + 0.6(Y â T)
I = 2400 â 60r
(Md/P) = 0.25Y â 50r
(MS/P) = 3000
G = 2000, T = 1800, NX = 300
Planned Expenditure = 5800 + 0.6Y - 80r
IS curve: Y = 14500 - 20r
LM curve: Y = 12000 + 200r
4. Determine the real interest rate and real GDP at which there is no unintended change in inventory and the money market is in equilibrium.
5. Suppose the G increases by $500. How will this affect r and how much private spending will be crowded out?
6. In the economy described above, a candidate for office proposes to increase government purchase by $100 and pay for it by raising taxes (T) by the same amount. Calculate real GDP and real interest rate by incorporating these changes.
C = 2180 â 20r + 0.6(Y â T)
I = 2400 â 60r
(Md/P) = 0.25Y â 50r
(MS/P) = 3000
G = 2000, T = 1800, NX = 300
Planned Expenditure = 5800 + 0.6Y - 80r
IS curve: Y = 14500 - 20r
LM curve: Y = 12000 + 200r
4. Determine the real interest rate and real GDP at which there is no unintended change in inventory and the money market is in equilibrium.
5. Suppose the G increases by $500. How will this affect r and how much private spending will be crowded out?
6. In the economy described above, a candidate for office proposes to increase government purchase by $100 and pay for it by raising taxes (T) by the same amount. Calculate real GDP and real interest rate by incorporating these changes.
walid-nourLv2
8 Nov 2023
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Tod ThielLv2
3 May 2019
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