6. An economy shows the following features :Consumption, C= 50 + 0.9 (Y – T)Tax Revenue, T= 100Investment, I= 150 – 5i%3DGovernment expenditure, G= 100Money demand, L = 0.2 y – 10iMReal money suPply=100PExports, X= 20Imports, M= 10+ 0.1 Ywhere Y= income, irate of interest figures in Rs. crores.%3D(a) Obtain the IS and IM equations of the economy(b) Find out equilibrium income and rate of interest atom(c) Find the balance of trade

Y = C+I+G+NX Y = National income or GDP C= Consumption expenditure I = Investment expenditure G=…

6. An economy shows the following features : Consumption, C= 50 + 0.9 (Y – T) Tax Revenue, T= 100 Investment, I= 150 – 5i Government expenditure, G = 100 Money demand, L = 0.2 y – 10i %3D M Real money supPply =100 Exports, X= 20 Imports, M= 10+ 0.1 Y where Y= income, i = rate of interest figures in Rs. crores. (a) Obtain the IS and IM equations of the economy (b) Find out equilibrium income and rate of interest atom (c) Find the balance of trade

6. An economy shows the following features : Consumption, C= 50 + 0.9 (Y – T) Tax Revenue, T= 100 Investment, I= 150 – 5i Government expenditure, G = 100 Money demand, L = 0.2 y – 10i %3D M Real money supPply =100 Exports, X= 20 Imports, M= 10+ 0.1 Y where Y= income, i = rate of interest figures in Rs. crores. (a) Obtain the IS and IM equations of the economy (b) Find out equilibrium income and rate of interest atom (c) Find the balance of trade

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter16: The Influence Of Monetary And Fiscal Policy On Aggregate Demand

Section: Chapter Questions

Problem 8PA

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