Consider the following numerical example of the IS-LM model:
C = 100 + 0.3YD
I = 150 + 0.2Y - 1000i
T = 100
G = 200
i = 0.01
a) What is the equilibrium level out output (Y)?
b) suppose the government increase spending to G=300. What is the new equilibrium level out output?
c) G = 200. What is the equilibrium supply of money id the demand for money is given by (M/P)d = 2Y - 4000i?
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