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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.

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    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