20. Assume that an economy is characterized by the following equations:а.C=100+(2/3)(Y-T)T=600G=500I=800-(50/3)rM/P=M/P=0.5Y-50rWrite the numerical IS curve for the economy, expressing Yas a numerical function of G,T, and r.b. Write the numerical LM curve for this economy, expressing r as a function of Y and M/P.C. Solve for the equilibrium values of Yand r, assuming P=1.0 and M=1,200. How dothey change when P=2.0? Check by computing C, I, and G.d. Write the numerical aggregate demand curve for this economy, expressing Yas afunction of G, T, and MP.

Equation of consumption function: C=100+(2/3)(Y−T)Tax revenue T=600Government expenditure…

20. Assume that an economy is characterized by the following equations: a. C=100+(2/3)(Y-T) T=600 G=500 I=800-(50/3)r M/P=M/P=0.5Y-50r Write the numerical IS curve for the economy, expressing Yas a numerical function of G, T, and r. b. Write the numerical LM curve for this economy, expressing as a function of Y and MP. C. Solve for the equilibrium values of Y and r, assuming P= 1.0 and M=1,200. How do they change when P=2.0? Check by computing C, I, and G.

20. Assume that an economy is characterized by the following equations: a. C=100+(2/3)(Y-T) T=600 G=500 I=800-(50/3)r M/P=M/P=0.5Y-50r Write the numerical IS curve for the economy, expressing Yas a numerical function of G, T, and r. b. Write the numerical LM curve for this economy, expressing as a function of Y and MP. C. Solve for the equilibrium values of Y and r, assuming P= 1.0 and M=1,200. How do they change when P=2.0? Check by computing C, I, and G.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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