Consider the open economy IS/LM model with the following functions: C = 0.5(Y − T ), I = 1500 − 250r, NX = 1000 − 250e,
Posted: Sun Jun 05, 2022 4:44 pm
Consider the open economy IS/LM model with the following
functions: C = 0.5(Y − T ), I = 1500 − 250r, NX = 1000 − 250e,
L(Y,r) = 0.5Y − 500r (money demand), CF = 500−250r. Taxes,
government purchases, the money supply, and price level are T =
1000, G = 1500, M = 1000, and P = 1. Calculate the equilibrium
values for GDP Y , the interest rate r, consumption C, investment
I, net capital outflow CF, net exports NX, and the exchange rate
e.
functions: C = 0.5(Y − T ), I = 1500 − 250r, NX = 1000 − 250e,
L(Y,r) = 0.5Y − 500r (money demand), CF = 500−250r. Taxes,
government purchases, the money supply, and price level are T =
1000, G = 1500, M = 1000, and P = 1. Calculate the equilibrium
values for GDP Y , the interest rate r, consumption C, investment
I, net capital outflow CF, net exports NX, and the exchange rate
e.