Question 2. Consider the following IS-LM model: C = 200 + 0.25YD I-150 +0.25Y-1000i G= 250 T 200 (M/P)d 2Y-8000i M/P 1600 a. Derive the IS relation. (Hìnt: You want an equation with Y on the left side and everything else on the right.) b. Derive the LM relation. (Hint: It will be convenient for later use to rewrite this equat with i on the left side and everything else on the right.) . Solve for equilibrium real output. (Hint: Substitute the expression for the interest rat given by the LM equation into the IS equation and solve for output.) Solve for the equilih

Question 2. Consider the following IS-LM model: C = 200 + 0.25YD I-150 +0.25Y-1000i G= 250 T 200 (M/P)d 2Y-8000i M/P 1600 a. Derive the IS relation. (Hìnt: You want an equation with Y on the left side and everything else on the right.) b. Derive the LM relation. (Hint: It will be convenient for later use to rewrite this equat with i on the left side and everything else on the right.) . Solve for equilibrium real output. (Hint: Substitute the expression for the interest rat given by the LM equation into the IS equation and solve for output.) Solve for the equilih

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter5: Business And Economic Forecasting

Section: Chapter Questions

Problem 1.6CE: Estimate the double-log (log linear) time trend model for log cruise ship arrivals against log time....

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