Assume that investment, government expenditures, taxes are autonomous. C = 2000 + 0.65* (Y-T) I = 900 – 50i G = 400 T = 1500 M = 1000 P = 2 L = 0.50Y-25i a.What is the value of the sensitivity money demand to the level of income? b.What is the value of the nominal supply? c.What expression represents the IS curve? d.What is the equilibrium interest rate, i*?

Assume that investment, government expenditures, taxes are autonomous. C = 2000 + 0.65* (Y-T) I = 900 – 50i G = 400 T = 1500 M = 1000 P = 2 L = 0.50Y-25i a.What is the value of the sensitivity money demand to the level of income? b.What is the value of the nominal supply? c.What expression represents the IS curve? d.What is the equilibrium interest rate, i*?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter22: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 12P

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