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Consider the following IS/LM model for a closed economy

C=400+0.4yd ,I=200+0.3y-2000i, G=360,T=400 ,m/p=4y-100000i

ms=2600 (10 marks)

i.Derive the IS equation
ii.Derive the LM equation
iii.Solve for equilibrium real output
iv.Solve for the equilibrium interest rate
v.Solve for equilibrium value of consumption and investment

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M941052

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