Y= C + I + G C= 170 + 0.6( Y-T ) where T= 200+0.2Y I=...

Y= C + I + G

C= 170 + 0.6( Y-T ) where T= 200+0.2Y

I= 100-4r

G=350

( M/p) d= 0.75Y-6r

(Ms/P)= 735

1) What is the new equilibrium level of Y and r if the central bank increases money supply by 8%.

2) What is the new equilibrium level of Y and r if government spending is increased to 500 & central bank increases money supply by 8%

3) What is the new equilibrium level of Y and r if the government cut the tax to T=50 + 0.16 Y & central bank increases money supply by 8%

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

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