Assume the money supply increases to 2800 determine the

Reference no: EM13387478

Desired consumption is Cd = 100 + 0.8Y - 500r - 0.5G, and desired investment is Id = 10 -500r. Real money demand is Md/P = Y - 2000i. Other variables are πe = 0.05, G = 200, = 1000, and M = 2100.

(a) Find the equilibrium values of the real interest rate, consumption, investment, and the price level.

(b) Suppose the money supply increases to 2800. Find the equilibrium values of the real interest rate, consumption, investment, and the price level. Assume that the expected inflation rate is unchanged

(c) Tougher immigration laws reduce the working-age population. Use the IS-LM model to determine the effects on the general equilibrium values of the real wage, employment, output, the real interest rate, consumption, investment, and the price level. Draw the graph and explain in words.

Reference no: EM13387478

Questions Cloud

This week i want you to find the statement of cash flow for : this week we are studying the statement of cash flows.nbsp operating cash flow represents the cash that flows in and

Why are ratios used to analyze the financial statements of : 1. why are ratios used to analyze the financial statements of organizations?2. when common size ratios are

While jo is pleased with the current success of the nursery : jo brownrsquos nursery operation has grown from a small herb plot into a thriving nursery business. there are 10

1 define capital structure why should health care : 1. what is capital structure? why should health care organizations care about it?2. what is equity

Assume the money supply increases to 2800 determine the : desired consumption is cd 100 0.8y - 500r - 0.5g and desired investment is id 10 -500r. real money demand is mdp y

Describe the three steps in investment analysis true or : 1. what are the three steps in investment analysis?2. true or false investment analysis is concerned with

How did most employees feel about the monitoring of : the new chief executive officer ceo of your company is a strong believer in the four functions of management theory. in

Do you believe that organizations should consider : an organizations culture can place severe limits in its abilities to perceive swots as well as constrain possible

Which gaap requires the use of depreciation for assets that : 1. which gaap requires the use of depreciation for assets that have useful lives beyond 1 year? explain why this

User Account

All Pages