Consider the Savings-Investment model involving: The Savings function: S = S0+s1Y+s2r; and the Investment function: I = I0+ir; where: Y = GDP, r = interest rate; and equilibrium occurs when Savings equal Investment. (i) Solve for the equilibrium GDP Y* (ii) Using your Y*, find the Investment-Multiplier dY*/dI0
Consider the Savings-Investment model involving: The Savings function: S = S0+s1Y+s2r; and the Investment function: I = I0+ir; where: Y = GDP, r = interest rate; and equilibrium occurs when Savings equal Investment. (i) Solve for the equilibrium GDP Y* (ii) Using your Y*, find the Investment-Multiplier dY*/dI0
Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?
Section9.A: The Simple Algebra Of Income Determination And The Multiplier
Problem 5TY
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Consider the Savings-Investment model involving:
The Savings function: S = S0+s1Y+s2r; and the Investment function: I = I0+ir;
where: Y =
(i) Solve for the equilibrium GDP Y*
(ii) Using your Y*, find the Investment-Multiplier dY*/dI0
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