Determine the IS curve graphically given the goods market equilibrium below. 32- S, (Y = 400) S2(Y = 600) S3(Ý = 800) 28- 24- 20- B 16- 12- (r) 100 150 200 250 300 Desired national saving / desired investment 50 1.) Using the point drawing tool, plot three points, one for each level of real GDP. Properly label each point. 2.) Use the line drawing tool to connect these points and properly label the line. ..... ............ ......... Real Interest Rate, r (%)

Determine the IS curve graphically given the goods market equilibrium below. 32- S, (Y = 400) S2(Y = 600) S3(Ý = 800) 28- 24- 20- B 16- 12- (r) 100 150 200 250 300 Desired national saving / desired investment 50 1.) Using the point drawing tool, plot three points, one for each level of real GDP. Properly label each point. 2.) Use the line drawing tool to connect these points and properly label the line. ..... ............ ......... Real Interest Rate, r (%)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that Y=MX+b, where Y=consumption, b=consumption at zero income, M=slope, and X=income(i) Are Y and X positively related or are they negatively related?(ii) If graphed, would the curve for this equation slope upward or slope downward?(iii) Are the variables Y and X inversely related or directly related?(iv) What is the value of Y if b=10, M=.50, and X=200?(v) What is the value of X if Y=100, b=10, and M=.25?
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