Find an equation relating desired national saving

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Desired consumption and investment areC^d=360-200r+0.10YI^d=120-400r As usual, YrG is output and is the real interest rate. Government purchases are 120.

  1. Find an equation relating desired national saving Sd to r and Y.
  2. What value of the real interest rate clears the goods market when Y = 600? Use both forms of the goods market equilibrium condition. What value of the real interest rate clears the goods market when Y = 640? What if Y = 560? What if Y = 680?
  3. Graph the IS curve. 

Reference no: EM132786595

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