Assume Money supply is fixed at 41175 and the expected inflationrate is 1%
Production Function: F= A(15N - .005N^2) A=3
Supply Curve: Ns= 70 + 10 (1-t)w (w=wage)
tax rate= .4
Consumption = Cd= 900 + 0.7 (Y-T) - 100r
Investment = 900- 100r
Government tax= 20 +.4Y G= 91
Money Demand= L = .4Y - 200i
1. Find the general equilibrium level of real wage, employment,and output.
2. Find the general equilibrium level of real interest rate,consumption, and investment
3. find the price level in the general equilibrium
4. Find the equation that describes the LM curve
Show your work.
Assume Money supply is fixed at 41175 and the expected inflation rate is 1% Production Function: F= A(15N - .005N^2) A=3
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