Suppose you are given values for C = 350 + 0.6 (Y - T), Ip = 200, G = 150, G* = 170, M = 0, X = 0, T = 190, T* = 140, t = 0

Where G* and T* are the corresponding foreign counterparts to the domestic variables without an Asterix.

How do I incorporate the G* and T* values when calculating short run equilibrium output? I am aware how to calculate the short run equilibrium output without the G* and T* values. So please do not answer this question if you are not going to include the G* and T* values or are not going to provide an explanation as to how to deal with these values.

Answer rating: 100% (QA)

To incorporate the G and T values when calculating shortrun equilibrium output you need to consider ... View the full answer