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
​
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.

---

Definitions:

Blue-Collar Manual Laborers

Refers to workers who perform manual labor, often in industries that require physical work, such as construction, manufacturing, and maintenance.

Employee Empowerment Unionism

An approach to unionism emphasizing the enhancement of workers' control over their work environment and decision-making processes.

Servicing Model

A model of union activity that emphasizes providing services to members, such as negotiating contracts and addressing grievances, rather than focusing on broader social or political change.

Economic Exchange

The act of trading goods, services, or both between two or more parties, forming the basis of most economic systems.