A) Find the equations for the IS curve and LM curve.

B) Solve for equilibrium real output (Y), interest rate (r), consumption (C), and Investment (I).

C) If government spending increased to 700, solve again for the equilibrium Y, r, C, and I.

Solution Preview

A) IS curve:
Y = C + I + G + (X - M)
Y = (400 + 0.5Yd) + (700 - 4000r + 0.1Y) + 200 + 0
Y = 400 + 0.5(Y - TP) + 700 - 4000r + 0.1Y + 200
Y = 400 + 0.5Y - 0.5(-200) + 700 -4000r + 0.1Y + 200
Y = 0.5Y + 0.1Y + 400 - 100 + 700 + 200 - 4000r
Y - 0.5Y - 0.1Y = 1200 - 4000r
0.4Y = 1200 - 4000r
Rearranging:
4000r = 1200 - 0.4Y
Solving for r gives us the equation of the IS curve:
r = 0.3 - ...

Solution Summary

This solution shows how to find the equations of the IS and LM curves and how to use them to find equilibrium output (Y), interest rate (r), consumption (C), and investment (I). Then the equilibrium is recalculated if government spending (Q) increases.

Please see the attached files for the fully formatted problems.
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3x + 5y - 2z = 20; 4x - 10y -z = -25; x + y -z = 5
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Hello,
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(Please see the attached file for the complete problem description)
Show that the problem of finding geodesics on a surface g(x,y,z) = 0 joining points (x_1,y_1,z_1) and (x_2,y_2,z_2) can be found by obtaining the minimum of:
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The demandand supply curves for T-shirts in LA, Ca, are given by the following equations:
Q= 24,000 - 500P Q= 6,000 + 1,000P
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Assume following (equations) summarize/represent structure of economy. If:
C=Ca + 0.75(Y-T)
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Cost Data
Consider the following cost functions:
TC = 20 + 4Q
TC = 20 + 2Q + 0.5Q2
TC = 20 + 4Q - 0.1Q2
Using Excel, calculate all cost curves using a range of quantity from 0 to 15.
Total cost
Total fixed Cost
Total variable cost
Average total cost
Average fixed cost
Average variable cost
Marginal cost