Suppose that the equation for autonomous planned

Question # 00578070 Posted By: dr.tony Updated on: 08/24/2017 06:53 AM Due on: 08/24/2017
Subject Economics Topic Macroeconomics Tutorials:
Question
Dot Image
IS LM Curve

. Problem 1
Suppose that the equation for autonomous planned spending, Apr is Ap = 6,200-200r and the value of the multiplier, k, is 2.5.
(a) Derive the equation for the IS curve, Y = kAp. Graph the IS curve for interest rates between 0 and 8, with intervals of one-half of a percentage point.

(b) Suppose the equation for the LM curve is Y = 13,500 + 100r. Use this equation to explain the level of income at which there is a zero lower bound on the federal funds rate, the interest rate that the Fed controls.

(c) Graph the LM curve for interest rates between 0 and 8, with interval of one-half of a percentage point.

Dot Image
Tutorials for this Question
  1. Tutorial # 00575985 Posted By: dr.tony Posted on: 08/24/2017 06:54 AM
    Puchased By: 2
    Tutorial Preview
    The solution of Suppose that the equation for autonomous planned...
    Attachments
    Suppose_that_the_equation_for_autonomous_planned.ZIP (18.96 KB)

Great! We have found the solution of this question!

Whatsapp Lisa