Consider the following macroeconomic goods market model: Y=C+I0+X0-MC=C0+bYM=M0+mYThe three endogenous variables are Y,C and M . (X is exports, M is imports). I0,X0, are constants and are coefficients (both are between 0 and 1) (a). Write this system as a 3 x 3 matrix system Ax = d where x = Y C M (b). Show that the determinant is A = 1 - b+m(c). Use Cramer’s Rule to find Y,C and M

Given: To show the given statement as follows: Y=C+I0+X0-MC=C0+bYM=M0+mY

Answered: onsider the following macroeconomic…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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Consider the following macroeconomic goods market model:

Y=C+I₀+X₀-M
C=C₀+bY
M=M₀+mY
The three endogenous variables are Y,C and M . (X is exports, M is imports). I₀,X₀, are constants and are coefficients (both are between 0 and 1)

(a). Write this system as a 3 x 3 matrix system Ax = d where x = Y

(b). Show that the determinant is A = 1 - b+m

(c). Use Cramer’s Rule to find Y,C and M

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