Assume that investment, government expenditures, taxes are autonomous. C = 2000 + 0.65* (Y-T) I = 900 – 50i G = 400 T = 1500 M = 1000 P = 2 L = 0.50Y-25i a.What is the value of the sensitivity money demand to the level of income? b.What is the value of the nominal supply? c.What expression represents the IS curve? d.What is the equilibrium interest rate, i*?
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Assume that investment, government expenditures, taxes are autonomous.
C = 2000 + 0.65* (Y-T)
I = 900 – 50i
G = 400
T = 1500
M = 1000
P = 2
L = 0.50Y-25i
a.What is the value of the sensitivity money
b.What is the value of the nominal supply?
c.What expression represents the IS curve?
d.What is the equilibrium interest rate, i*?
e.What is the equilibrium income, Y*?
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