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Economics

You are given the following two IS curves that show how real GDP (Yt) in the current time period t depends on the current interest rate and interest rates in previous periods, where rt is the interst rte in time period t. Furthermore each time period corresponds to a quarter or three months.

II. \(Y_{t}=8,400-5r_{t}-5r_{t-1}-5r_{t-2}-5r_{t-3}-5r_{t-4}-10r_{t-5}-15r_{t-6}-15r_{t-7}-15r_{t-8}-20r_{t-9}\)

I. \(Y_{t}= 8,800-25r_{t}-25r_{t-1}-25r_{t-2}-25r_{t-3}-25r_{t-4}-25r_{t-5}-25r_{t-6}-25r_{t-7}-25r_{t-8}-25r_{t-9}\)

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M9474773

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