Really great job. Thank you so much. I really love it. Thank you so much for all of your help.
Consider the economy of Hicksonia.
a. The consumption function is given by
C=300+0.6(Y−T).
The
investment function is
I=700−80r.
Government purchases and taxes are both 500. For this economy, graph the IS
curve for r ranging from 0 to 8.
b. The money demand function in Hicksonia is
(M/P)d=Y−200r.
The money supply M is 3,000, and the price level P is 3. Graph the LM curve for
r ranging from 0 to 8.
c. Find the equilibrium interest rate r and equilibrium income Y.
d. Suppose that government purchases are increased from 500 to 700. How does
the IS curve shift? What are the new equilibrium interest rate and income?
e. Suppose instead that the money supply is increased from 3,000 to 4,500. How
does the LM curve shift? What are the new equilibrium interest rate and
income?
f. With the initial values for monetary and fiscal policy, suppose the price level
rises from 3 to 5. What happens? What are the new equilibrium interest rate
and income?
g. For the initial value of monetary and fiscal policy, derive and graph an
equation for the aggregate demand curve. What happens to this aggregate
demand curve if fiscal or monetary policy changes, as in parts (d) and (e)?
Show more
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more