C=300+0.50(Y-T) Investment function is I=100-20t Government purchases and taxes are both 150 Money demand function (M/P)d=Y-150r Money supply M=1000 Price level P=2 a. Calculate equilibrium interest rate r b. Calclate equilibrium level of income Y
C=300+0.50(Y-T) Investment function is I=100-20t Government purchases and taxes are both 150 Money demand function (M/P)d=Y-150r Money supply M=1000 Price level P=2 a. Calculate equilibrium interest rate r b. Calclate equilibrium level of income Y
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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C=300+0.50(Y-T)
Investment function is I=100-20t
Government purchases and taxes are both 150
Money demand function (M/P)d=Y-150r
Money supply M=1000
Price level P=2
a. Calculate equilibrium interest rate r
b. Calclate equilibrium level of income Y
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