The economy is described by the following functions: C 120 + 0.8Y D %3D Tr 15 %3D Tr = 5 I = 50 – 5i G = 80 %3D Nx = 10 • Q1. Derive the IS curve • Q2. Suppose taxes in the economy go up by 5, so the new value for taxes is 10. Derive the new IS curve • Q3. Illustrate the change in the (Y, i) coordinates

The economy is described by the following functions: C 120 + 0.8Y D %3D Tr 15 %3D Tr = 5 I = 50 – 5i G = 80 %3D Nx = 10 • Q1. Derive the IS curve • Q2. Suppose taxes in the economy go up by 5, so the new value for taxes is 10. Derive the new IS curve • Q3. Illustrate the change in the (Y, i) coordinates

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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