Please explain whole parts on paper please!! 5) Consider the following economy: (Desired consumption.Desired investmentReal money demandExpected inflationFull-employment outputNominal money supplyGovernment purchasesTaxesC-200+0.8(Y-T)-500rF-200-500rL=0.5Y-250ix=0.10Y=1000M=9890G=196T-20 +0.25Ya) Find an equation describing the IS curve.b) Find an equation describing the LM curve.e) What are the general equilibrium values of output, real interest rate and the price level?

IS - LM stands that investment savings-liquidity preference-money supply which show the relationship…

5) Consider the following economy: ( Desired consumption Desired investment Real money demand Expected inflation Full-employment output Nominal money supply Government purchases Taxes C-200+0.8(Y-T)-500r N-200-500r L-0.5Y-250 x=0.10 Y-1000 M-9890 G=196 T-20+0.25Y a) Find an equation describing the IS curve. b) Find an equation describing the LM curve. c) the

5) Consider the following economy: ( Desired consumption Desired investment Real money demand Expected inflation Full-employment output Nominal money supply Government purchases Taxes C-200+0.8(Y-T)-500r N-200-500r L-0.5Y-250 x=0.10 Y-1000 M-9890 G=196 T-20+0.25Y a) Find an equation describing the IS curve. b) Find an equation describing the LM curve. c) the

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter8: Aggregate Demand And The Powerful Consumer

Section: Chapter Questions

Problem 8DQ

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