Assume that the long-run level of output is Y = 1000, which the economy is also at initially in the short-run. Suppose that the consumptionand investment functions are, respectivley,C = 100 + 0.8(Y – Ť),1- 100— 2000г,that is, MPC is 0.8. Furthermore, the LM (money market equilibrium) curve isM.200The government is currently implementing a policyG = 80,Ť = 50,and the central bank (CB) is supplying M = 1000.Expected inflation is T° = 0.Continuing from Part 1, due to the uncertainty surrounding the coronavirus, consumers tighten their belts and consumption functionchanges toC = 40 + 0.8(Y – T).Focus only on the economy's short-run responses, that is, when the price level P cannot adjust.Derive the new IS curve. It should be written in the form Y = A - Bi, that is, you only need to solve for the values of A =and

Assume that the long-run level of output is Y = 1000, which the economy is also at initially in the short-run. Suppose that the consumption and investment functions are, respectivley,. C = 100 + 0.8(Y – Ť), I = 100 – 2000r, that is, MPC is 0.8. Furthermore, the LM (money market equilibrium) curve is 200 The government is currently implementing a policy Ğ = 80, T = 50, and the central bank (CB) is supplying M = 1000. Expected inflation is a = 0. Continuing from Part 1, due to the uncertainty surrounding the coronavirus, consumers tighten their belts and consumption function changes to C = 40 + 0.8(Y – T). Focus only on the economy's short-run responses, that is, when the price level P cannot adjust. Derive the new IS curve. It should be written in the form Y = A - Bi, that is, you only need to solve for the values of A = and B =

Assume that the long-run level of output is Y = 1000, which the economy is also at initially in the short-run. Suppose that the consumption and investment functions are, respectivley,. C = 100 + 0.8(Y – Ť), I = 100 – 2000r, that is, MPC is 0.8. Furthermore, the LM (money market equilibrium) curve is 200 The government is currently implementing a policy Ğ = 80, T = 50, and the central bank (CB) is supplying M = 1000. Expected inflation is a = 0. Continuing from Part 1, due to the uncertainty surrounding the coronavirus, consumers tighten their belts and consumption function changes to C = 40 + 0.8(Y – T). Focus only on the economy's short-run responses, that is, when the price level P cannot adjust. Derive the new IS curve. It should be written in the form Y = A - Bi, that is, you only need to solve for the values of A = and B =

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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