If C= 5 +0.6Y, I=4-0.2 r, G = 5, T = 6, X = 10 dan M = 10+ 0.3 Y, Ms = 20, Mdt = 0.1 Y and Mds = 50.1 r where C is consumption expenditure, Y is income, I is investment, G is government expenditure, T is tax, X is export, M is import, Ms is money supply, Mdt is money demand for transaction and Mds money demand for speculation. a) Calculate the equilibrium interest rate and income

If C= 5 +0.6Y, I=4-0.2 r, G = 5, T = 6, X = 10 dan M = 10+ 0.3 Y, Ms = 20, Mdt = 0.1 Y and Mds = 50.1 r where C is consumption expenditure, Y is income, I is investment, G is government expenditure, T is tax, X is export, M is import, Ms is money supply, Mdt is money demand for transaction and Mds money demand for speculation. a) Calculate the equilibrium interest rate and income

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter14: Macroeconomic Policy: Tradeoffs, Expectations, Credibility, And Sources Of Business Cycles

Section: Chapter Questions

Problem 11E

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If C = 5 + 0.6Y, I = 4 – 0.2 r, G = 5, T = 6, X = 10 dan M = 10 + 0.3 Y, Ms = 20, Mdt = 0.1 Y and Mds = 5 – 0.1 r where C is consumption expenditure, Y is income, I is investment, G is government expenditure, T is tax, X is export, M is import, Ms is money supply, Mdt is money demand for transactian and Mds money demand for speculation. Form the IS curve for the economy above.
Consider following IS-LM model: C = 200 + 0.25 · YD I = 150 + 0. 25 · Y – 1, 000 · i G = 250 T = 200 D M = 2 · Y – 8, 000 · i M = 1,600 P e) Solve for the equilibrium values of C and I! f) Solve for the equilibrium values of Y, i, C and I, if the money suppl increases to 1,840! g) Solve for the equilibrium values of Y, i, C and I, if government spending increases to 400 (the money supply is 1,600)!
Consider the economy of Ghana. The consumption function is given by C = 400 + 0.8(Y - T). The investment function is I = 600 - 70r. Government purchases is 400. Assume a balanced budget. The money demand function is (M/P)d = Y - 180r. The money supply M is 3,000 and the price level P is 3. Find the equilibrium interest rate r and the equilibrium level of income Y. Suppose that government purchases are increased from 400 to What are the new equilibrium interest rate and level of income? Suppose instead that the money supply is increased from 3,000 to 3,500. What are the new equilibrium interest rate and level of income? With the initial values for monetary and fiscal policy, suppose that the price level rises from 3 to 5 What are the new equilibrium interest rate and level of income? Please solve 4
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