5 Given a) Find the equation for IS and LM b) Find equilibrium output, the rate of interest, and investment. c) Find new equilibrium output, rate of interest and investment when government spending increase from $100 to $120 d) Explain the changes/effects of economy when there is an increase government expenditure L=0.20Y -10i M = 200 C = 60 + 0.80Yd Tx =100 I=150 -2i G = 100

5 Given a) Find the equation for IS and LM b) Find equilibrium output, the rate of interest, and investment. c) Find new equilibrium output, rate of interest and investment when government spending increase from $100 to $120 d) Explain the changes/effects of economy when there is an increase government expenditure L=0.20Y -10i M = 200 C = 60 + 0.80Yd Tx =100 I=150 -2i G = 100

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter19: The Keynesian Model In Action

Section: Chapter Questions

Problem 5SQP

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