Calculate equilibrium levels of real output nd interest rate

Assignment Help Macroeconomics

Reference no: EM13235156

Suppose that the following equations represent an economy.
C=170+0.6(Y-T)
T=200
I=100-4r
G=350
(M/P)d=L=0.75Y-6r

Ms/P=735

All are measured in billions and r is measured as a percent, e.g. r=10 means 10%.

a). Derive the equation for the IS curve

b)Find the equation for LM curve.c)

c) express both IS and LM curves in terms of r, and graph both curves.Find their slopes.

d) Calculate the equilibrium levels of real utput, interest rate, planned investment, and consumption.

Reference no: EM13235156

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