Consider an economy described by the following data: C= $3.25 trillion T = $1.3 trillion G= $3.5 trillion T= $3.0 trillion (NX) =- $1.0 trillion mpc = 0.75 d= 0.3 x= 0.1 Required/Solve the following by providing formulas and all the necessary steps: (A) Derive simplified expressions (equations) for the consumption function, the investment function, and the net export function (B) Derive an expression for the IS curve. (C) if r= 2, what is equilibrium output? If r= 5, what is equilibrium output? (D) Draw a graph of the IS curve showing the answers from part (C) above. (Note: if you cannot draw a graph here than draw on

Consider an economy described by the following data: C= $3.25 trillion T = $1.3 trillion G= $3.5 trillion T= $3.0 trillion (NX) =- $1.0 trillion mpc = 0.75 d= 0.3 x= 0.1 Required/Solve the following by providing formulas and all the necessary steps: (A) Derive simplified expressions (equations) for the consumption function, the investment function, and the net export function (B) Derive an expression for the IS curve. (C) if r= 2, what is equilibrium output? If r= 5, what is equilibrium output? (D) Draw a graph of the IS curve showing the answers from part (C) above. (Note: if you cannot draw a graph here than draw on

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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