In an economy following data are given: consumption function C - 250 + 0·5 ( Y - T) - 500r (Investment function) : I = 250 - 500r Real Money Demond : Md/P =0.5y - 500r Real Money Supply : Ms/P = 7650/P Aggregate Supply = Full employment level = (¥) = I000 Government expenditure = G = Tax = T = 200 Find out (1) IS curve (it) Equation of LM curve (iii) Equauon of AD curve (iv) Equilibrium values of P. r, C and I (v) Show graphically what happens to equilibrium values when money supply increases.
@@riiajais1833 find r in terms or p. put it into IS eqn. you get y in terms of p, set it equal to AS=1000, you get p. find r by putting this value in LM eqn.
I think your LM equation is not complete because your supposed to make the i the subject of the formula and then substitute it in the IS equation to get the equilibrium level of income Ye. coz now ur answer for Ye and interest rate is wrong.
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In an economy following data are given:
consumption function C - 250 + 0·5 ( Y - T) - 500r
(Investment function) : I = 250 - 500r
Real Money Demond : Md/P =0.5y - 500r
Real Money Supply : Ms/P = 7650/P
Aggregate Supply = Full employment level = (¥) = I000
Government expenditure = G = Tax = T = 200
Find out (1) IS curve
(it) Equation of LM curve
(iii) Equauon of AD curve
(iv) Equilibrium values of P. r, C and I
(v) Show graphically what happens to equilibrium values when money supply
increases.
Sir please make video on this plz plz plz plz 🙏🙏🙏
@@riiajais1833 find r in terms or p. put it into IS eqn. you get y in terms of p, set it equal to AS=1000, you get p. find r by putting this value in LM eqn.
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thanks for your contribution, please can i have the full question? thank you
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Last futi💯
Sir in Lm equation,why we find Y equation instead of "i"
As in another video u find i value in LM equation
Help me please
Solved a question please
I think your LM equation is not complete because your supposed to make the i the subject of the formula and then substitute it in the IS equation to get the equilibrium level of income Ye. coz now ur answer for Ye and interest rate is wrong.
i have included i in the LM equation. as for substuting i in IS equation i have done same by equating IS with LM. still I ll check it again.
@@ECONMATHS the issue is from your division. 300/6000 is 0.05 not 0.03 so you can correct it from there.Aside that you did a great job explaining👏
Thank you sir