a) how many degrees of freedom are there in this equation b) differentiate the Equation c) Put dM = 0 and find dY/dr and dI/dr

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Macroeconomic model

 

Y = GDP

C = private consumption

I = investment

G = public consumption and G is constant

r. = interest rates

m = supply of money

C,h and L are differential functions

a) how many degrees of freedom are there in this equation

b) differentiate the Equation

c) Put dM = 0 and find dY/dr and dI/dr

Y = C+I+G
C = C(Y)
I = h(Y,r)
M = L(Y,r)
Transcribed Image Text:Y = C+I+G C = C(Y) I = h(Y,r) M = L(Y,r)
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