Question: A ) If C = 5 0 0 + 5 ( Y - T ) , I = 2 0 0 - 5 0 r

A) If C=500+5(Y-T),I=200-50r, government spending is 300, and taxes are 300. Find the equation of the is curve.
B) The money demand function is given by (MP)d=Y-100r. Find the equation of th UM curve if Money supply is 1,000 and the price level is 2. Now solve for equilibrium income and interest rate from the IS-LM curves in (A) and (B).
C) If the money supply is raised to 1,200(and all the other variables are the same), solve for the new equilibrium income and interest rate.
A ) If C = 5 0 0 + 5 ( Y - T ) , I = 2 0 0 - 5 0

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