Question

In: Economics

1. *Suppose that the economy is described by: Y =C(Y,T)+I(Y,i)+G, with G, T exogenous. (a) Use...

1. *Suppose that the economy is described by: Y =C(Y,T)+I(Y,i)+G, with G, T exogenous.

(a) Use the total derivative to derive di/dY

(b) What is the sign of this derivative?

(c) What does the slope of the line depend on? Explain the intuition.

(d) Graph this curve.

(e) Use the total derivative to find dY/dG and dY/dT

Solutions

Expert Solution

Rahul Sunny answered 1 year ago
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