Question: Q3Z = C + I + G C = 100 + 0.75Y d I = 80 + 0.1Y - 150 i G = 60,T =

Q3Z = C + I + G

C = 100 + 0.75Yd

I = 80 + 0.1Y - 150i

G = 60,T = 40

Md= Y - 3000i

Ms= 1000

  1. Derive the IS curve
  2. Derive the LM curve.
  3. Find the equilibrium values ofiand Y.
  4. Suppose G increases to 100, what is the new level of output then? Calculate using a multiplier.

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