Consider the following short-run IS-LM model with income taxation. The economy is described by equations (1) through (6): (1) C= 500+ 0.75(Y-T) (2) T = 800 (3) G = 550 (4) 1 700 30 r (5) Y=C+I+G (6) M/P = 0.6Y - 60r where the nominal money supply M-1200 and the price level is P = 2. Then, in the short run, the equilibrium output for the economy is given by (approximately): Y*=2524.14 Y=2636.80 Y=2245.00 Y*=1900.00

Consider the following short-run IS-LM model with income taxation. The economy is described by equations (1) through (6): (1) C= 500+ 0.75(Y-T) (2) T = 800 (3) G = 550 (4) 1 700 30 r (5) Y=C+I+G (6) M/P = 0.6Y - 60r where the nominal money supply M-1200 and the price level is P = 2. Then, in the short run, the equilibrium output for the economy is given by (approximately): Y=2524.14 Y=2636.80 Y=2245.00 Y=1900.00

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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