Answer to Question #334123 in Macroeconomics for Preetha

Question

C = 200 + 0.75 Yd, (dengan Yd = Y – T)

I = 400 – 600r

G = 100

T = 20 

a. i. Derive the equation for the curve IS.

ii. Calculate the slope of the IS curve above.

b. i. Calculate the equilibrium value of income if the interest rates are 10 percent and 20 percent.

 ii. Based on the answer to question b (i), draw the IS curve.

Answer 1

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