Values of income and intrest rate, Basic Statistics

Now imagine that consumption is given as:

            C = 400 + 0.9YD - 1,750i

And as above:

      Y = PE = C + I + G + NX                           (Income identity)

      I = 200 - 1,800i                                        (Investment)

NX = 200 - 0.1Y - 200i                                     (Net exports)

MD = (0.8Y - 3,000i)                                     (Money demand)

And that as before government spending G = $200, the tax rate t = 0.3333, and the money supply MS = $1,104 (and assume the price level is constant at P = 1).

a.  Under these assumptions, what is the IS curve?

b.  What are the values of income (Y) and the interest rate (i) when the IS-LM model is in equilibrium?

c.  How does this new IS curve compare to your original IS curve from problem #4?  That is, is your new IS curve flatter or steeper?  Given your answer, would you suspect that monetary policy would be more (or less) effective in the current model versus the original model?  Briefly explain.

Posted Date: 2/21/2013 8:12:46 AM | Location : United States







Related Discussions:- Values of income and intrest rate, Assignment Help, Ask Question on Values of income and intrest rate, Get Answer, Expert's Help, Values of income and intrest rate Discussions

Write discussion on Values of income and intrest rate
Your posts are moderated
Related Questions
So I can send you a word problem & you van send the answers back in excel for me?

A Biology student estimates that the probability that a certain organism will live beyond 24 hours is .40. If he conducts on 7 of this type or organisms, find the probability that


It is known that the average height of a man residing in the Canada is 174 cm and the standard deviation is 8 cm. Assume the heights are normally distributed. To test the hypothesi

Budgetary control The manage or management of a governmental component in agreement with an approved budget for the purpose of keeping expenditures within the limits of available

Where an element of randomness is introduce by suing random numbers to pick up the unit with which to start this process of sampling is known as systematic sampling.

Question 1 A courier company conducted a brainstorming session amongst drivers to ascertain the reasons why it was unable to deliver items to households, always right first ti

If there are 12 numbered balls in a basket (0-11), and you get 6 chances to pick a ball what are the odds to get two of the same number, 3 of the same number, 4, 5 and 6. I would

You are working for the management of ESK Jewellery as a marketing consultant. The main business of ESK Jewellery is the retailing of diamond jewellery. They opened their first sho

1. A researcher is comparing two middle school 7th grade classes. One class at one school has participated in an arts program (involving putting on a musical play) which emphasized