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Answer to Question #51593 in Macroeconomics for Nicoleta
Question #51593
Given that:
C = 0.5Y + 50
I = -10r + 650
Ms = 3000
L1 = 0.4Y
L2 = -15r + 2750
Md = L1 + L2
Where:
L1 = Transaction and Precautionary demand for money
L2 = Speculative demand for money
Determine the equilibrium values of national income (Y) and interest rate (r) on the assumption that the commodity and money markets are in equilibrium. Show the equilibrium values of Y and r on a graph
C = 0.5Y + 50
I = -10r + 650
Ms = 3000
L1 = 0.4Y
L2 = -15r + 2750
Md = L1 + L2
Where:
L1 = Transaction and Precautionary demand for money
L2 = Speculative demand for money
Determine the equilibrium values of national income (Y) and interest rate (r) on the assumption that the commodity and money markets are in equilibrium. Show the equilibrium values of Y and r on a graph
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