Assume That an Economy Is Characterized by the Following Equations

question 12

Essay

Assume that an economy is characterized by the following equations:
C = 100 + (2/3)(Y - T)
T = 600
G = 500
I = 800 - (50/3)r
Ms/P = Md/P = 0.5Y - 50r
a.Write the numerical IS curve for the economy, expressing Y as a numerical function of G, T, and r.
b.Write the numerical LM curve for this economy, expressing r as a function of Y
and M/P.
c.Solve for the equilibrium values of Y and r, assuming P = 1.0 and M = 1,200.
How do they change when P = 2.0? Check by computing C, I, and G.
d.Write the numerical aggregate demand curve for this economy, expressing Y as a function of G, T, and M/P.

Grasp the concept of expected returns and their relation to investment risk.

Know the differences between equity and debt in terms of risk.

Understand the role of diversification in managing investment risk.

Recognize the measures of risk such as standard deviation, variance, and the coefficient of variation.

---

Definitions:

Symbol System

A set of symbols and rules for combining them, which might be used for communication, such as language, or representation of data and processes.

Others' Eyes

A perspective or viewpoint that considers how an individual is viewed or judged by other people.

Differentiate Themselves

The process by which individuals or entities distinguish themselves from others in characteristics, actions, or attributes.

Salience Hierarchy

The ranking or importance of stimuli or elements in the environment, determining which are noticed and given attention by an individual.