# Answer to Question #51593 in Macroeconomics for Nicoleta

Question #51593

Given that:

C = 0.5Y + 50

I = -10r + 650

Ms = 3000

L1 = 0.4Y

L2 = -15r + 2750

Md = L1 + L2

Where:

L1 = Transaction and Precautionary demand for money

L2 = Speculative demand for money

Determine the equilibrium values of national income (Y) and interest rate (r) on the assumption that the commodity and money markets are in equilibrium. Show the equilibrium values of Y and r on a graph

C = 0.5Y + 50

I = -10r + 650

Ms = 3000

L1 = 0.4Y

L2 = -15r + 2750

Md = L1 + L2

Where:

L1 = Transaction and Precautionary demand for money

L2 = Speculative demand for money

Determine the equilibrium values of national income (Y) and interest rate (r) on the assumption that the commodity and money markets are in equilibrium. Show the equilibrium values of Y and r on a graph

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