Equilibrium in the money market, Macroeconomics

Assignment Help:

Equilibrium in the money market

In the IS-LM-model, we have equilibrium in the money market when

MD(Y, R) = MS

This is the equation from money market and we have already one equation from aggregate demand which is,

YD(Y, R) = C(Y) + I(R) + G + X - Im(Y)

Now we will conclude all endogenous variables in the IS-LM model:

Y_D(Y, R) = Y equilibrium in the goods market

M_D(Y, R) = M_S equilibrium in the money market

Now we have two equations and two unknown (Y and R) and in most cases we can find a unique solution to system of equations.

Related Discussions:- Equilibrium in the money market

Every month price of the telecommunication services, You are an assistant t...

You are an assistant to a senator who chairs an ad hoc committee on reforming taxes on telecommunication services. Based on your research, AT&T has spent over $15 million on relate

National income, effects of tax increase on the gross domestic product

effects of tax increase on the gross domestic product

Opportunity Costs, Comparative if Person can make 15 wristbands and hour an...

Comparative if Person can make 15 wristbands and hour and 3 potholders. What is the comparative advantage? If same person works 20 hours a week graph the possible combinations sh

Expect to affect economic growth and wealth, Despite the economic progress ...

Despite the economic progress that the U.S. has observed in the past century, the standard of living remains extremely low in many countries. Why are some countries relatively weal

Right to sell blood, Singer suggests that although the right to sell blood ...

Singer suggests that although the right to sell blood does not threaten the formal right to give blood, it is incompatible with "the right to give blood, which cannot be bought, wh

Aggregate supply in the short run, Aggregate Supply in the Short Run P...

Aggregate Supply in the Short Run Production takes place in business sector on the basis of an expected price for its output. However, costs are incurred in anticipation of sa

Federal and state taxing-tax-exempt, Please select either question (a) or q...

Please select either question (a) or question (b). Do NOT answer both questions. a. Mr. William Randolph Hearst is an entrepreneur based in California. He owns many newspaper

National income computation, What is the formula for computing for national...

What is the formula for computing for national income in a closed economy with government intervention

Marginal abatement cost curve, A critically important criterion that must b...

A critically important criterion that must be considered in evaluating environmental policies is whether they provide strong incentives for people to find new ways to improve ambie

Components in the costs of health care services, What are the key component...

What are the key components in the costs of health care services?

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages