I need assitance on how to get these answers. Question 4. The short run: from IS/LM to aggregate demandAn economy is as followsGoods market:slc=5MPC=0.72Go=20, T=18LM:Financial market:I = 18 200rMoney market0.02MPAnswers Provided:4. (a) 80.4, 4.77%Y(r-5000M=40, P=2(a) In the long-term equilibrium before shocks and policies, the expenditure is Y=74, r=4.65, andP=2. Given the IS/LM equations,IS: Y = 5 +0.72(Y − 18) + 22 + 18 - 200rM0.02PY50002The government spending changes to G₁=22. Find the new very short run equilibrium output.(b) Graph the comparative statics (before and after) of the very short run equilibrium in terms ofIS/LM and, on a separate graph, in terms of the AD curve. Label all axes, curves, and values.Note: you can but do not need to calculate the new equilibrium interest rate. While graphing AD,remember the definition of the very short run.

In the ISLM model, the IS curve stands for 'Investment-Spending' and the LM curve stands for…

Question 4. The short run: from IS/LM to aggregate demand An economy is as follows Goods market: slc=5 MPC=0.72 Go=20, T=18 Financial market: I 18 200r IS: Y = 5 +0.72(Y - 18) +22+ 18 - 200r M 0.02 P Y 5000 LM: Money market 0.02 M P Answers Provided: 4. (a) 80.4, 4.77% = M=40, P=2 (a) In the long-term equilibrium before shocks and policies, the expenditure is Y=74, r=4.65, and P=2. Given the IS/LM equations, Y 5000/ 2 The government spending changes to G₁=22. Find the new very short run equilibrium output. (b) Graph the comparative statics (before and after) of the very short run equilibrium in terms of IS/LM and, on a separate graph, in terms of the AD curve. Label all axes, curves, and values. Note: you can but do not need to calculate the new equilibrium interest rate. While graphing AD, remember the definition of the very short run.

Question 4. The short run: from IS/LM to aggregate demand An economy is as follows Goods market: slc=5 MPC=0.72 Go=20, T=18 Financial market: I 18 200r IS: Y = 5 +0.72(Y - 18) +22+ 18 - 200r M 0.02 P Y 5000 LM: Money market 0.02 M P Answers Provided: 4. (a) 80.4, 4.77% = M=40, P=2 (a) In the long-term equilibrium before shocks and policies, the expenditure is Y=74, r=4.65, and P=2. Given the IS/LM equations, Y 5000/ 2 The government spending changes to G₁=22. Find the new very short run equilibrium output. (b) Graph the comparative statics (before and after) of the very short run equilibrium in terms of IS/LM and, on a separate graph, in terms of the AD curve. Label all axes, curves, and values. Note: you can but do not need to calculate the new equilibrium interest rate. While graphing AD, remember the definition of the very short run.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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