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for the unique equilibrium (r",Y). You should also assume that f' (Y) = (0, 1) (Why?). Find dr/d Mo and dy /d Go, and interpret your results. www.tr wwwwwwww

for the unique equilibrium (r",Y). You should also assume that f' (Y) = (0, 1) (Why?). Find dr/d Mo and dy /d Go, and interpret your results. www.tr wwwwwwww

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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  • Equilibrium-defining equations in an IS-LM model are presented as follows:

? = ? + ? + ?, ? = ?0 + ƒ(? ) − ?(?), ? = ?0 − ℎ(?),

? =  ?0, and ?0  =  3? − i(?)

where ?0, ?0, ?0, ?0 > 0 are exogenous variables, and ƒ, ?, ℎ, i are continuously differentiable and strictly increasing functions satisfying:

?* = ?0 + ƒ(?* ) − ?(?*) + ?0 − ℎ(?*) +  ?0

?0  =  3?*  − i(?*).

for the unique equilibrium (?* , ?*). You should also assume that ƒ ′ (?*) ∈ (0, 1) (Why?). Find

??*/? ?0 and ??* /? ?0, and interpret your results.

1- Equilibrium-defining equations in an IS-LM model are presented as follows: Y=C+I+G, C = C₁ + f(Y) = g(r), I = 1o — h(r), G = Go, and Mo = 3Y - i(r) where Co, Io, Go, Mo> 0 are exogenous variables, and f, g, h, i are continuously differentiable wwwwww and strictly increasing functions satisfying: Y = C₁ + f(Y) = g(r*) + Io − h(r) + Go Mo 3Yi(*). = for the unique equilibrium (rª,Y*). You should also assume that f' (Y) = (0, 1) (Why?). Find dr*/d Mo and dy* /d Go, and interpret your results.
Transcribed Image Text:1- Equilibrium-defining equations in an IS-LM model are presented as follows: Y=C+I+G, C = C₁ + f(Y) = g(r), I = 1o — h(r), G = Go, and Mo = 3Y - i(r) where Co, Io, Go, Mo> 0 are exogenous variables, and f, g, h, i are continuously differentiable wwwwww and strictly increasing functions satisfying: Y = C₁ + f(Y) = g(r*) + Io − h(r) + Go Mo 3Yi(*). = for the unique equilibrium (rª,Y*). You should also assume that f' (Y) = (0, 1) (Why?). Find dr*/d Mo and dy* /d Go, and interpret your results.
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