luestión 5 An economy is described by the following: C=20+0.9Y 1=120-200r

Macroeconomics
13th Edition
ISBN:9781337617390
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter8: Aggregate Demand And Aggregate Supply
Section8.5: Long Run Aggregate Supply
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Question 5
An economy is described by the following:
C=20+0.9Y
1=120-200r
Md=250+0.2Y-400r
Ms/P=1250
Y=70 VI
W=17.5
Lf-144
a) Find AS and AD.
b) Find the equilibrium level of Y and P.
c) Graphically represent this economy.
d) Find the long-run Y of this economy.
e) What is the level of government expenses G, the government needs to impose in order
to lead the economy to the full employment? (Show the long-run graphically).
Transcribed Image Text:Question 5 An economy is described by the following: C=20+0.9Y 1=120-200r Md=250+0.2Y-400r Ms/P=1250 Y=70 VI W=17.5 Lf-144 a) Find AS and AD. b) Find the equilibrium level of Y and P. c) Graphically represent this economy. d) Find the long-run Y of this economy. e) What is the level of government expenses G, the government needs to impose in order to lead the economy to the full employment? (Show the long-run graphically).
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