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Analyze the behavior of the markets for goods

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Reference no: EM13689656

Prepare a two page (double-spaced) essay and answer the following questions:

Assume that we have the following data:

C=100+0.50Y
Ip=100-20r
Mt=0.10Y
Ms=100-10r
M=80

a. Build the IS-LM function.

b. If we assume an increase in Investments by 100 units, please calculate again the IS-LM functions.

c. The intersection of IS-LM functions defines four areas. Please analyze the behavior of the markets for goods and money for each area.

Reference no: EM13689656

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