Assume That an Economy Is Characterized by the Following Equations

question 91

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
M^s / P = M^d / P = 0.5Y - 50r
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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.

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Definitions:

Medical Technology

The use of technology and devices in the diagnosis, treatment, and monitoring of medical conditions and diseases.

Equilibrium Price

Equilibrium Price is the price at which the quantity of a good demanded equals the quantity supplied, leading to market stability.

Health Insurance

A kind of insurance policy that reimburses the insured for their medical and surgical bills.

Equilibrium Price

The equilibrium price in the market, where the quantity of items provided meets the quantity of items consumers wish to buy.