Calculate the interest rate

Reference no: EM1369507

2(a) Derive the expression for the IS schedule Y = C + I + G in the form i = f(Y), when C = 130 + 0.3Y, I = 100 - 35i, and G = 50.

(b) Calculate the interest rate when the equilibrium level of income is 100 and 300.

(c) Derive the expression for the LM schedule in the form i = f(Y), when the money demand function is Md = 680 + 0.8Y - 20i, and the money supply function is M^S = 880.

(d) Calculate the interest rate when the equilibrium level of income is $500.

(e) Graph the IS and LM curves on the same diagram, showing the intercepts and slope.

(h) Using Cramer's rule, find the level of income and the interest rate for which the money market and the goods market are simultaneously in equilibrium and show them in the diagram. (Answer: Y* = 300, i* = 2.0).

Reference no: EM1369507

Questions Cloud

Explain your selected scenario and prepare a chart : Explain your selected scenario and prepare a chart in which you illustrate how you would apply classical conditioning theory to the scenario

How will caadp work when or initiatives have failed in past : Systems to predict food shortages also need reviewing: early warning systems are of limited use without an effective response from policymakers. How will CAADP work when or initiatives have failed in past.

Provide example of array and how it could be used : Provide the example of the Array and how it could be used. Then look over sections on ArrayLists. Would an ArrayList be better suited for your use?

What happens if democrats have a fairly socialist party : By choosing to right of mid point but to left of republican agenda democrats would get more than half of votes and win What happens if democrats have a fairly socialist party agenda and locate to left of midpoint.

Calculate the interest rate : Derive the expression for the LM schedule in the form i= f(Y), when the money demand function is Md = 680 + 0.8Y - 20i, and the money supply function is M^S = 880.

Under which of the following circumstances : Under which of the following circumstances will a limited partnership be dissolved and A limited partner dies and his estate is insolvent

Create a statement of work for auditors : Purchasing of services often involves creating a statement of work. You need to hire some financial auditors to help with the annual audit.

Job evaluation vs performance evaluation : How would you explain the difference between these two things - Job Evaluation Vs Performance Evaluation

Who benefits from technological progress in farming farmers : barbers who have turned farmers will drive down wage rate but will still be earning more than if y had remained barbers. Who benefits from technological progress in farming Farmers or barbers.

User Account

All Pages