Consider the following short-run closed economy IS-LM model described by equations (1) through (6): (1) C...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Consider the following short-run closed economy IS-LM model described by equations (1) through (6): (1) C = 500 + 0.75(Y – T); (2) T = 120+0.2Y;(3) G = 1300; (4) 1 =900 - 40 r ; (5) Y = C+ I + G; (6) M/P = 0.5Y - 50r where the nominal money supply M=2000. Equation (5) is the goods market equilibrium condition (IS equation), while equation (6) is the money market equilibrium condition (LM equation). Suppose that the price level Pis not given. Then the aggregate demand equation for this model is: a) Y=2250.5 + 1000/P b) 6552.5 + 4000/P c) Y= 4270 + 3000/P d) Y= 3262.5 + 2000/P Consider the following short-run closed economy IS-LM model described by equations (1) through (6): (1) C = 500 + 0.75(Y – T); (2) T = 120+0.2Y;(3) G = 1300; (4) 1 =900 - 40 r ; (5) Y = C+ I + G; (6) M/P = 0.5Y - 50r where the nominal money supply M=2000. Equation (5) is the goods market equilibrium condition (IS equation), while equation (6) is the money market equilibrium condition (LM equation). Suppose that the price level Pis not given. Then the aggregate demand equation for this model is: a) Y=2250.5 + 1000/P b) 6552.5 + 4000/P c) Y= 4270 + 3000/P d) Y= 3262.5 + 2000/P
Expert Answer:
Answer rating: 100% (QA)
The detailed answer for the above question is provided below To derive the aggregate demand equation ... View the full answer
Related Book For
Posted Date:
Students also viewed these economics questions
-
Xavier'sInc. is offering a classic used car gor 3,999$.The credit terms are 48 months at 125$ per month.What is the anual rate on this offer? A. 22.19 percent B. 2.00 percent C. 1.80 percent D. 24.0...
-
KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
-
The production function in an economy is Y = A(5N- 0.0025N2), where A is productivity. With this production function, the marginal product of labour is MPN = 5A- 0.005AN. Suppose that A = 2. The...
-
Calculate z(2, 3, 1), where (x, y, z) = xyz.
-
David Novak is Chairman of the Board of YUM! Brands, Inc. Suppose Mr. Novak has just founded YUM! Brands, and assume that he treats his home and other personal assets as part of YUM! Brands. Answer...
-
Dahl Company, a clothing manufacturer, uses a standard costing system. Each unit of a finished product contains 2 metres of cloth. However, there is unavoidable waste of 20%, calculated on input...
-
On July 1, Esquire Tables, Inc., began work on Job No. 309. The order is for 45 No. ET42 game tables for stock; date wanted is July 10. Instructions: 1. Open a cost sheet and record the transactions....
-
Torrey Products Inc. is considering replacing an old piece of machinery, which cost $350,000 and has $115,000 of accumulated depreciation to date, with a new machine that costs $420,000. The old...
-
In recent years, Monty Company has purchased three machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation...
-
In Part III (Appendix 11B) of the audit case, the audit staff of Adams, Barnes & Co. identified specific revenue risks on working paper RA-12 (page 494). However, the Summary of Audit Approach...
-
Part I Price 1 2 Q of World Demand for U.S.-Grown Pecans . 3 4 5 6 Instructions: The following are fictitious headlines about the pecan market. In each case, decide if the information will cause a...
-
How do researchers "model" the sentencing process?
-
How would a judge using a retributive justification for punishment answer the question, "Why do we punish those who violate the law?" How would a judge using a utilitarian justification answer the...
-
What elements of a control system can be used to safeguard resources? Explain.
-
Do you think the SOX legislation was adequate to prevent fraud such as the Madoff scandal?
-
What are some examples of the greater level of responsibility that the SOX legislation imposes on senior executives?
-
On the "gel" below, draw where you would expect to find the following samples after they run: Lane A: a single pure protein weighing 94 kDa Lane B: a fraction containing one major protein weighing...
-
Classify each of the following as direct costs or indirect costs of operating the Pediatrics ward for children at the Cleveland Clinic: a. Wi-Fi covering the entire hospital campus b. Net cost of...
-
Go to the LearnChemE screencast link for Chapter 9 (http://www.umich.edu/~elements/6e/09chap/learn-cheme-videos.html). 1. View one of the screencast 5- to 6-minute video (1) PSSH, (2) Cell Growth,...
-
Redo Problem P9-17B (a), (c), and (d) using the Tessier equation r g = max [1 e Cs/k ]C c with max = 1.0 h1 and k = 8 g/dm3. Data from problem P9-17B (a), (c), and (d) a. The reaction is to be...
-
What if the temperature in the CRE Web site Professional Reference Shelf Example R15.2 were increased? How would the relative resistances in the slurry reactor change?
-
The chart below summarizes the U.S. exchange traded companies that issued corrections to their financial statements during the years 2001 through 2014. The data was compiled by Audit Analytics and...
-
Earnings management may be used to avoid a technical default of a covenant under a loan agreement. Loan covenants are written into loan agreements in order to protect a lender from various actions...
-
Presented below is a list of accounting events for the Longo Corporation. Classify each of the events as an operating (O) activity event, an investing (I) activity event, a financing (F) activity...
Study smarter with the SolutionInn App