C=130+0.8Yd L=(1/5)*Y-10iT=100+1/4YM=150I=300-20iP=1G=150a. Solve for the IS/LM curves and determineY* and i*b. Confirm (a) above using the Y* and i*expressions from the generalized IS-LM functionsc. Verify that the respective multipliers from the generalizedform of the IS/LM functions are the same as those derivedfrom the linear form.

The IS curve defines a total set of interest rate and productivity (GDP) levels, where total…

C=130+0.8Yd L=(1/5)*Y-10i T=100+1/4Y M=150 1=300-20i P=1 G=150 a. Solve for the IS/LM curves and determine Y* and i* b. Confirm (a) above using the Y* and i* expressions from the generalized IS-LM functions

C=130+0.8Yd L=(1/5)Y-10i T=100+1/4Y M=150 1=300-20i P=1 G=150 a. Solve for the IS/LM curves and determine Y and i* b. Confirm (a) above using the Y* and i* expressions from the generalized IS-LM functions

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

C=130+0.8Yd L=(1/5)*Y-10i
T=100+1/4Y
M=150
I=300-20i
P=1
G=150
a. Solve for the IS/LM curves and determine
Y* and i*
b. Confirm (a) above using the Y* and i*
expressions from the generalized IS-LM functions
c. Verify that the respective multipliers from the generalized
form of the IS/LM functions are the same as those derived
from the linear form.

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