Answered: The following equations describe an…

The following equations describe an economy: C= 10 + 0.5 Y (Consumption function) I = 190-20i (Investment function) Derive the equations for IS curve and represent it graphically for i=2 and i=5

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter9: Aggregate Expenditures

Section: Chapter Questions

Problem 7E

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Question

The following equations describe an economy:

C= 10 + 0.5 Y (Consumption function)

I = 190-20i (Investment function)

Derive the equations for IS curve and represent it graphically for i=2 and i=5

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