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johnpaul92 johnpaul92
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Desired consumption is C to power of ((d)) = 2000 + 0.9Y - 100,000r - G, and desired investment is I to power of ((d)) = 1000 - 45,000r. Real money demand is M to power of ((d))/P = Y - 6000i. Other variables are π to power of ((e)) = 0.03, G = 500, overbar(Y) = 1000, and M = 2100.
(a)   Find the equilibrium values of the real interest rate, consumption, investment, and the price level.
(b)   Suppose government purchases decline to 400. What happens to the variables listed in part (a)?
(c)   Suppose government purchases rise to 600. What happens to the variables listed in part (a)?
(d)   What feature in this example leads to the result that you don't need to know the amount of taxes collected by the government to find the equilibrium?
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Macroeconomics

Macroeconomics


Edition: 8th
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supamansupaman
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johnpaul92 Author
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#2
8 years ago
Wow, you answered what I thought was impossible to answer, thank you!
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#3
8 years ago
Take care for now
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#4
5 years ago
Thank your for the answer
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#5
5 years ago
thank you
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#6
4 years ago
wow great
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#7
3 years ago
Thank you so much for your answer
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