Answered: If the IS curve is given by…

If the IS curve is given by Y=1,700–100r and the LM curve is given by Y=500+100r, then equilibrium income and interest rate are given by: Y=1100 , r=5% Y=1100, r=6% Y= 1000, r=5% Y=1200 , r=5%

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter27: Investment, The Capital Market, And The Wealth Of Nations

Section: Chapter Questions

Problem 14CQ

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Question

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If the IS curve is given by Y=1,700–100r and the LM curve is given by Y=500+100r, then equilibrium income
and interest rate are given by:
Y=1100 , r=5%
Y=1100, r=6%
Y= 1000, r=5%
Y=1200 , r=5%

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