6. An economy shows the following features :Consumption, C= 50 + 0.9 (Y – T)Tax Revenue, T= 100Investment, I= 150 – 5i%3DGovernment expenditure, G= 100Money demand, L = 0.2 y – 10iMReal money suPply=100PExports, X= 20Imports, M= 10+ 0.1 Ywhere Y= income, irate of interest figures in Rs. crores.%3D(a) Obtain the IS and IM equations of the economy(b) Find out equilibrium income and rate of interest atom(c) Find the balance of trade

Y = C+I+G+NX Y = National income or GDP C= Consumption expenditure I = Investment expenditure G=…

6. An economy shows the following features : Consumption, C= 50 + 0.9 (Y – T) Tax Revenue, T= 100 Investment, I= 150 – 5i Government expenditure, G = 100 Money demand, L = 0.2 y – 10i %3D M Real money supPply =100 Exports, X= 20 Imports, M= 10+ 0.1 Y where Y= income, i = rate of interest figures in Rs. crores. (a) Obtain the IS and IM equations of the economy (b) Find out equilibrium income and rate of interest atom (c) Find the balance of trade

6. An economy shows the following features : Consumption, C= 50 + 0.9 (Y – T) Tax Revenue, T= 100 Investment, I= 150 – 5i Government expenditure, G = 100 Money demand, L = 0.2 y – 10i %3D M Real money supPply =100 Exports, X= 20 Imports, M= 10+ 0.1 Y where Y= income, i = rate of interest figures in Rs. crores. (a) Obtain the IS and IM equations of the economy (b) Find out equilibrium income and rate of interest atom (c) Find the balance of trade

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter20: Exchange Rates And The Macroeconomy

Section: Chapter Questions

Problem 3TY

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3. An economy shows the following featuresConsumption, C = 50 + 0.9YdTax Revenue, T = 100Investment, I = 150 – 5iGovernment Expenditure, G = 100Money demand, L = 0.2Y – 10iMoney Supply, M = 100Exports, X = 20Imports, M = 10 + 0.1YN/BYd is the disposable incomeRequired,(a) Obtain the IS and LM equations of the economy(b) Find the equilibrium income and rate of interest(c) Find the balance of trade
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