For the Commodity Market C = AY + B and I

question 7

Multiple Choice

For the commodity market C = aY + b and I = cr + d
For the money market MS = MS* and MD = k1Y + k2r + k3
If both markets are in equilibrium, find the matrix A such that Ax = b where $\mathbf { x } = \left[ \begin{array} { l } \boldsymbol { r } \\\bar { Y }\end{array} \right] \text { and } \mathbf { b } = \left[ \begin{array} { c } M _ { S } { } ^ { * } - k _ { 3 } \\b + d\end{array} \right]$

• A) \(\left[\begin{array}{ccc}
• k_{2} & & k_{1} \\
• -c & 1 & -a
• \end{array}\right]\)
• B) \(\left[ \begin{array} { l l } a - 1 & - c \\ k _ { 1 } & k _ { 2 } \end{array} \right]\)
• C) \(\left[ \begin{array} { l l } 1 - a & - c \\ k _ { 1 } & k _ { 2 } \end{array} \right]\)
• D) \(\left[ \begin{array} { l r } a - 1 & c \\ k _ { 1 } & k _ { 2 } \end{array} \right]\)
• E) \(\left[ \begin{array} { l r } k _ { 2 } & k _ { 1 } \\ c & a - 1 \end{array} \right]\)

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