Consider an economy with the following specifications. Consumption Expenditure (C) = 120 + 0.56Yd Tax Function (Tx) = 40 + 0.25Y Transfer Payment (Tr) = 36 Investment function (1) = 100 – 45i Government Expenditure (G) = 75 Nominal money supply (M) = 300 Price Level (P) = 5 Money Demand (Md) = 0.9Y – 150i (Here, Yd stands for disposable income, Y is for National Income, i for interest rate and all othe figures are in Rs. Million)

Consider an economy with the following specifications. Consumption Expenditure (C) = 120 + 0.56Yd Tax Function (Tx) = 40 + 0.25Y Transfer Payment (Tr) = 36 Investment function (1) = 100 – 45i Government Expenditure (G) = 75 Nominal money supply (M) = 300 Price Level (P) = 5 Money Demand (Md) = 0.9Y – 150i (Here, Yd stands for disposable income, Y is for National Income, i for interest rate and all othe figures are in Rs. Million)

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter26: Monetary Policy

Section: Chapter Questions

Problem 1SQ

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