Answer the following 3 sub parts. The rate of interest regarding the problem is 8 (in #1 question) just answer the question 4,5,6 II. Problem Solving: An economy shows the following features: (All figures are in Php)Consumption-..C = 50+0.9(Y – T)Tax Revenue..T =100Investment ...I =150 – 5iGovt Expenditures ..G = 100Money Demand .L = 0.2Y – 101|Money Supply..M = 100Exports... X = 20Im ports ... M = 10 +0.10Y4. Find the fiscal position of the government.5. If money supply increases by 60, find the new equilibrium level of income and rate ofinterest.6. Using govt. expenditure as a policy variable, how much additional governmentexpenditures should be injected in the economy to achieve the rate of interest in #1.

The equilibrium interest rate and the equilibrium level of income can be determined by the…

Answered: III. Problem Solving: An economy shows…

III. Problem Solving: An economy shows the following features: (All figures are in Php) Consumption -..C = 50 +0.9(Y – T) Tax Revenue·..T = 100 %3! Investment ...I =150- 5i

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter20: Exchange Rates And The Macroeconomy

Section: Chapter Questions

Problem 3TY

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