Elasticity conditions, Increasing the minimum wage will

Elasticity conditions

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Reference no: EM136751

Q. Under what elasticity conditions would the following be true:

"Increasing the minimum wage will result in a decrease in employment for workers who now earn less than the new minimum wage"?

Suppose the economy is represented by the following equations:
Md/P = 6Y - 120r Ms/P = 5,400
C = 180 + 0.7(Y-T) I = 100 - 18r + 0.1Y T = 400 G = 400
Y = C + I + G

a. Write the numerical formula for the IS curve?
b. Write the numerical formula for the LM curve?
a. What is the equilibrium level of r?
b. What is the equilibrium Y?
c. What is the value of consumption?
d. What is the value of Investment?
e. What is the level of real Money Demand?

Reference no: EM136751

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