1. (20 pts) An IS-LM economy is described by the following equations: C = 350 + 0.8(Y - T); I = 700 - 80r; G = 500; T =
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- 1 20 Pts An Is Lm Economy Is Described By The Following Equations C 350 0 8 Y T I 700 80r G 500 T 1 (123.94 KiB) Viewed 28 times
1. (20 pts) An IS-LM economy is described by the following equations: C = 350 + 0.8(Y - T); I = 700 - 80r; G = 500; T = 500; (M/P)d = Y - 200r; M = 3,000; P = 3.- a) Derive the IS curve and the LM curve equations b) Calculate the equilibrium r and Y- c) Suppose that government purchases are increased from 500 to 550. What are the new equilibrium values of r and Y?4 A E