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Economics

Consider the following model of a closed economy:
Yd=C+I+G
C=300+0.75(Y-T)
Y=Yd
Md/P=0.05(Y/(r+πe))
Ms/P=Md/P
G=195
T=400
Ms=4800
P=2
πe=0.035

a) find the equation that describes the IS curve
b) find the equation that describes the LM curve
c) find the equilibrium values of real interest rate and income
d) if autonomous consumption rises from 300 to 400 how will this affect the equilibrium level of income?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9679056

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