# equilibrium real output

C= 300+.3Yd

I= 250+.2Y-1200i

G=300

T=250

(M/P)=3Y-9000i;M/P=1800

Using the above derive the IS and LM relations and solve for the equilibrium real output.

Solve for the equilibrium interest rate and the equilibrium values of C and I.

Then assume M/P rises to 1890 and solve for the new Y and i.

https://brainmass.com/economics/general-equilibrium/equilibrium-real-output-149944

#### Solution Preview

1. Given

C= 300+.3Yd

I= 250+.2Y-1200i

G=300

T=250

(M/P)=3Y-9000i;M/P=1800

Using the above derive the IS and LM relations and solve for the equilibrium real output.

The aggregate expenditure function gives:

Y = C +I+G

and Yd = Y-T

Substitute the conditions into the above equation:

Y = (300+.3(Y-T)) + (250+.2Y-1200i) + G

Y ...

#### Solution Summary

Derive the IS and LM relations and solve for the equilibrium real output for this case.

$2.19