Question: Please answer all 4 parts Table 1. (Note: Notation used in the Table follows from the lectures) C- 3 mpc = 0.9 I- 5 C

Please answer all 4 parts

Table 1. (Note: Notation used in the Table follows from the lectures) C- 3 mpc = 0.9 I- 5 C = 0.08 G - 2 d = 0.4 T - 2 = 0.1 NX - 1 If - 4 Using the values in the table above, answer the following questions. (Show your work) a) Derive the expression for the IS curve (i.e., Y = f(r)) (3 points) b) If the real interest rate is 10%, what is the value of equilibrium real GDP (Y)? (2 points) [Hint: Use the interest rate as 10 NOT 0.1) c) If the real interest rate equals 10%, calculate equilibrium values for the following: [Hint: Use the interest rate as 10 NOT 0.1) i) Consumption (C) - (2 points) ii) Investment (1) = (2 points) iii) Net Exports (NX) = (2 points) d) Use the values in (c) above to confirm the goods market equilibrium value of Y in Part (b) above. (hint: Goods market equilibrium: Y = C + | + G+ NX) points)
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