# Answer on Macroeconomics Question for Paul

Question #37328

Consider the following IS/LM model for a closed economy

C=400+0.4yd ,I=200+0.3y-2000i, G=360,T=400 ,m/p=4y-100000i

ms=2600 (10 marks)

i. Derive the IS equation

Y = C + I + G

ii. Derive the LM equation

iii. Solve for equilibrium real output

iv. Solve for the equilibrium interest rate

v. Solve for equilibrium value of consumption and investment

An open macroeconomic model is represented parametrically as follows

C=400+0.4yd ,I=200+0.3y-2000i, G=360,T=400 ,m/p=4y-100000i

ms=2600 (10 marks)

i. Derive the IS equation

Y = C + I + G

ii. Derive the LM equation

iii. Solve for equilibrium real output

iv. Solve for the equilibrium interest rate

v. Solve for equilibrium value of consumption and investment

An open macroeconomic model is represented parametrically as follows

Expert's answer

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