Equilibrium in the money market, Macroeconomics

Assignment Help:

Equilibrium in the money market 

In the IS-LM-model, we have equilibrium in the money market when

MD(Y, R) = MS

 

This is the equation from money market and we have already one equation from aggregate demand which is,

YD(Y, R) = C(Y) + I(R) + G + X - Im(Y)

Now we will conclude all endogenous variables in the IS-LM model: 

    YD(Y, R) = Y   equilibrium in the goods market

    MD(Y, R) = MS   equilibrium in the money market

Now we have two equations and two unknown (Y and R) and in most cases we can find a unique solution to system of equations.


Related Discussions:- Equilibrium in the money market

Mathematical solution for, given the market demand curve is P=a-bQ and MC=D...

given the market demand curve is P=a-bQ and MC=D. derive mathematicaly a perfect compettition, B monopoloy, C, Cournot Duopoly, D cournot Tipopoly, E cournot quadropoly, F Stackleb

Data and methodology - macroeconomy analysis, In order to estimate the VAR,...

In order to estimate the VAR, I have firstly to specify the data which will be analysed. As it is my aim to observe the correlations between oil prices and key macroeconomic variab

Elasticity of demand questions need to be done in graphs, To really underst...

To really understand it, compute the following price elasticities of demand: ·          The price of a laptop increases by 20% and there is a 40% drop in the quantity dem

National income, # ???? .. difference between gdp at market price and nnp...

# ???? .. difference between gdp at market price and nnp at factor cost

Aggregate supply and demand, Aggregate Supply and Demand 1. The equati...

Aggregate Supply and Demand 1. The equation for expenditure GDP is 2. Sketch a fully labeled aggregate supply and demand diagram for an economy that is in full employment equ

Recent study of long distance phone calls, A recent study of long distance ...

A recent study of long distance phone calls made from WPU, showed that the length of the calls follows the normal probability distribution with a mean of 3.2 minutes per call and a

Nations total income, If you take nations total income and subtract out pri...

If you take nations total income and subtract out private consumption government consumption what you will find?

Explain the determinants of transaction demand, Macro Economics 1. How...

Macro Economics 1. How was the Classical Theory of interest role criticized by Keynes? 2. Illustrate the barter system that was used in early times in lieu of money. 3.

Energy supply, What happens to the extraction path if the choke price falls...

What happens to the extraction path if the choke price falls

Effect on unemployment, From the lower left graph of Fig. it can be seen th...

From the lower left graph of Fig. it can be seen that there is a time lag associated with an oil price shock and its subsequent effect on unemployment. The results show that for th

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd