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 T=1 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. %3D %3!
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 T=1 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. %3D %3!
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Solve all the parts please don't leave last part its humble request.
All the best.
Transcribed Image Text: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
T= 1
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? Ifr= 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
seperate paper and scan it and upload it).
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