question archive Desired consumption is Cd = 50 + 0
Desired consumption is Cd = 50 + 0
Subject:EconomicsPrice:2.86 Bought11
Desired consumption is Cd = 50 + 0.5Y - 300r - 0.7G, where G = 50 and desired investment is Id = 100 - 400r. Real money demand is Md/P = Y - 1000r Other variables are P = 2 and M = 2100.
a. Find the equilibrium values of the real interest rate, output (Y), consumption, investment.
b. Suppose the money supply increases to 2800. Find the equilibrium values of the real interest rate and output (Y).
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