Consider an economy described by the followng: -$4 trillion -$1.5 trillion - $3.0 trillion - $3.0 trillion - $1.0 trillion NX -0.8 -0.35 - 0.15 - 0.5 - 2 a. Derive expressions/equations for the MP curve and the AD curve. b. Calculate the real interest rate and aggregate output whenR=2 and =4. c. Based on the answer of Question B. Explain the graphs of the MP curve and the AD curve in terms of upward or downward sloping

Consider an economy described by the followng: -$4 trillion -$1.5 trillion - $3.0 trillion - $3.0 trillion - $1.0 trillion NX -0.8 -0.35 - 0.15 - 0.5 - 2 a. Derive expressions/equations for the MP curve and the AD curve. b. Calculate the real interest rate and aggregate output whenR=2 and =4. c. Based on the answer of Question B. Explain the graphs of the MP curve and the AD curve in terms of upward or downward sloping

Macroeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter12: Fiscal Policy, Incentives, And Secondary Effects

Section: Chapter Questions

Problem 3CQ

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