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# equilibrium real output

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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.

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