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What is the equation that describes the is curve

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The following equations describe an economy. (think of C, I, G, etc., as being measured in billions and i as a percentage; a 5 percent interest rate implies i = 5.)

C = 0.8(1-t)Y

T = 0.25

I = 900-50i

G = 800

L = 0.25Y - 62.5i

M/P = 500

a) What is the equation that describes the IS curve?

b) What is the general description of the IS curve?

c) What is the equation that describes the LM curve?

d) What is the general description of the LM curve?

e) What are the equilibrium levels of income and the interest rate?

Reference no: EM132495488

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