Derive the equation for the is curve y kap. graph the is, Ask an Expert

Economics

Suppose that the equation for autonomous planned spending, Ap` is Ap = 6,200 - 200r and the value of the multiplier, k is 2.5

(a) Derive the equation for the IS curve, Y = kAp. Graph the IS curve for interest rates between 0 and 8, with intervals of one-half of a percentage point.

Y = 2.5(6,200-200r)
Y = 15,000

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