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Q. Consider the following IS/LM model for a closed economy
C=400+0.4yd ,I=200+0.3y-2000i, G=360,T=400 ,m/p=4y-100000ims=2600 (10 marks)i.Derive the IS equationii.Derive the LM equationIII.Solve for equilibrium real outputIV..Solve for the equilibrium interest ratev.Solve for equilibrium value of consumption and investment
Use indifference curves to distinguish between income and substitution effects, using the above techniques explain why the demand curve slope downwards, What are the main criteria for designing a tax system, To what extent do you think the national..
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Solve for steady-state level of captial and output. What savings rate would be necessary to achieve a steady-state output of 150.
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