Chapter 1. Chapter 11 – Problem 6
Step 1
Work It Out
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You must read each slide, and complete any questions on the slide, in sequence.
Question
The following equations describe an economy.
Y = C + I + G.
C = 120 + 0.5 (Y – T).
I = 100 – 10 r.
(M/P)d = Y – 20r.
G = 50.
T = 40.
M = 600.
P = 2.
7SHvmsSDYE72L5T7nWJWxAOFD9IMEpDlnBGCeHiehiZs8Cb/qhQSwVVDbty7otGN+lUmHPRaTbN93wI4TEsF8silnPmlI3oWULLQkyt8sKlcMvh/2wbwbF/GtsRFlrhkPCjBK2XcCW3wIlUzPV7O7nxGhjUKmnZIofAId6y01FlS8qbQkUDku51t76iJToD/rZwsOHQyAEfU9ZZzdKIrCr+F1ohrxFK8mSa0F+AyGIqXQEKoHgLz9g8Ws3WH0G58rOu5ekmgUw+hmoT5PmpczJwyQc3v32fq21Er88KE5q0ww39xD91WRVxJyvlvnLfEchbVl8GFv3c9hPJulMno7dphD+44HGTdnpF7OTKSfbOYgzObXQC64M9jxWIIFwZImNI6oA==Review Chapter 11 for details on the variables used in the ISLM model. Review pages 324-325, along with Figure 11-7, for a discussion of how to derive the IS curve.
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Step 2
Question
The following equations describe an economy.
Y = C + I + G.
C = 120 + 0.5 (Y – T).
I = 100 – 10 r.
(M/P)d = Y – 20r.
G = 50.
T = 40.
M = 600.
P = 2.
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 pages 330-332, along with Figure 11-11, for a discussion of how to derive the LM curve. Review pages 333-334, along with Figure 11-13, for a discussion of how to solve the ISLM model for the equilibrium interest rate and level of income.
Question
The equilibrium level of income, Y, is ogGXSFbg9qI=, and the equilibrium interest rate, r, is t7Z6y4UAOR0=%.
Review pages 330-332, along with Figure 11-11, for a discussion of how to derive the LM curve. Review pages 333-334, along with Figure 11-13, for a discussion of how to solve the ISLM model for the equilibrium interest rate and level of income.
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