An open economy with absolute mobility of capital is described as follows: consumption function is given as C = 50 + 0, 8(Y T), where Y is output, andT is net taxes. Investment function is given as I = 20–10i, where I is nominal interest rate. Government spending G = 20, tax Tx = 10, export Ex = 6E + 10, import Im = 22-4E +0,3Y where E - nominal exchange rate (price of foreign currency in terms of domestic currency). For one unit of foreign currency, you can get 3 units of domestic currency. The real money supply is M /P=50. The demand for real money is described by the following function:L(Y,i) = 0,5Y-10i. %3D Find IS curve in the form Y=a-bi+cE, where a,b,c are constants. Type in the answer these constants with spaces and commas between them, that is: a, b, c.
An open economy with absolute mobility of capital is described as follows: consumption function is given as C = 50 + 0, 8(Y T), where Y is output, andT is net taxes. Investment function is given as I = 20–10i, where I is nominal interest rate. Government spending G = 20, tax Tx = 10, export Ex = 6E + 10, import Im = 22-4E +0,3Y where E - nominal exchange rate (price of foreign currency in terms of domestic currency). For one unit of foreign currency, you can get 3 units of domestic currency. The real money supply is M /P=50. The demand for real money is described by the following function:L(Y,i) = 0,5Y-10i. %3D Find IS curve in the form Y=a-bi+cE, where a,b,c are constants. Type in the answer these constants with spaces and commas between them, that is: a, b, c.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![An open economy with absolute mobility of capital is described as follows: consumption function is given as C =
50 + 0, 8(Y T), where Y is output, andT is net taxes. Investment function is given as I = 20–10i, where I is
nominal interest rate. Government spending G = 20, taxTr = 10, export Ex = 6E+ 10, import Im=
22-4E+0, 3Y where E - nominal exchange rate (price of foreign currency in terms of domestic currency). For
one unit of foreign currency, you can get 3 units of domestic currency. The real money supply is M /P=50. The
demand for real money is described by the following function: L(Y, i) = 0, 5Y-10i.
Find IS curve in the form Y=a-bi+cE, where a,b,c are constants. Type in the answer these constants with spaces
and commas between them, that is: a, b, c.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9a5fe713-d1b2-4249-87b3-96b7260d5d62%2Fc7cc5517-1299-482b-806b-67d359f7d95b%2F9e65l0f_processed.jpeg&w=3840&q=75)
Transcribed Image Text:An open economy with absolute mobility of capital is described as follows: consumption function is given as C =
50 + 0, 8(Y T), where Y is output, andT is net taxes. Investment function is given as I = 20–10i, where I is
nominal interest rate. Government spending G = 20, taxTr = 10, export Ex = 6E+ 10, import Im=
22-4E+0, 3Y where E - nominal exchange rate (price of foreign currency in terms of domestic currency). For
one unit of foreign currency, you can get 3 units of domestic currency. The real money supply is M /P=50. The
demand for real money is described by the following function: L(Y, i) = 0, 5Y-10i.
Find IS curve in the form Y=a-bi+cE, where a,b,c are constants. Type in the answer these constants with spaces
and commas between them, that is: a, b, c.
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