Y ci g xc 220 063yi 400 - 2000r 01ym01583y - 1000rpx 600, Ask an Expert

Economics

Y= C+I +G +X

C= 220 + 0.63Y

I= 400 - 2000R + 0.1Y

M=(0.1583Y - 1,000R)P

X= 600 - 0.1Y - 100 EP/Pw

EP/Pw = 0.75 + 5R

G=1,200 and the money supply M=900. Suppose that the ROW price level Pw is always =1.0 and the US price level is predetermined at 1.0

A) Calculate a change in the mix of monetary and fiscal policy that leaves output equal to the level it is when M=900 and G=1,200 but in which the interest rate is 3% rather than 5%. Describe what happens to the value of the dollar, net exports, the government budget deficit, and investment for this change in policy.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91372653

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