2. Assume that the model is defined as follows: C-500+0.2(Y-T) I=200-r G=100 T=100 L(Y,r)=Y-5r M=1000 P=5...

 

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2. Assume that the model is defined as follows: C-500+0.2(Y-T) I=200-r G=100 T=100 L(Y,r)=Y-5r M=1000 P=5 a. Find the LM equation, calculate the slope of it. b. Find the IS equation, calculate the slope of it. c. Derive the equation for aggregate demand and calculate the slope of aggregate demand. Hint: P=p d. Find the equilibrium interest rate and equilibrium level of income. 2. Assume that the model is defined as follows: C-500+0.2(Y-T) I=200-r G=100 T=100 L(Y,r)=Y-5r M=1000 P=5 a. Find the LM equation, calculate the slope of it. b. Find the IS equation, calculate the slope of it. c. Derive the equation for aggregate demand and calculate the slope of aggregate demand. Hint: P=p d. Find the equilibrium interest rate and equilibrium level of income.