Question

Please provide a clear step-by-step explaination on finding the expression of the IS curve. Others have answered it but they just give the final result and I still dont know how to do it.

Date: 10/29/19 2019 14. Consider an economy described by the following T = $3.2 trillion 1 = $1,4 trillion G = $3.5 trillion T = $3 trillion NX = 5-0.5 trillion T= 1 mpc = 0.7 d = 0.3 X=0.15 The simplified expression for the consumption function is: O A C=1.1+(1 -0.7)Y. O B. C=3.2 +0.7Y OC. C=3.2 + (1 -0.7)Y. D. C= 1.1 +0.77 The simplified expression for the investment function is A. 1 = 1.1-0.3r. OB. 1= 32-0.71 OC. 1 = 1.1 -0.71 OD. I = 3.2-0.3r. The simplified expression for the net export function is: OA. NX = -0.15-0.5. OB. NX = -1.1 -0.7r. OC. NX = -0.7 -0.15r. D. NX = -0.5-0.15 An expression for the IS curve is: OA. Y = 17.33 - 32 OB. Y = 1.5-17.33 OC. Y = 17.33 -1.57 OD. Y = 17.33 -1.11 If the real interest rate is r= 1, equilibrium output y =$ trillion (Round your response to one decimal place) If the real interest rate is r=4, equilibrium output y =$ trillion (Round your response to one decimal place) $ trillion (Round your response If government purchases increase to $42 trillion and the real interest rate r= 1. equilibrium output to one decimal place) : 4. equilibrium output YES trillion (Round your response If government purchases increase to 54.2 trillion and the real interest rate to one decimal place.)

Nevermind. i figured it out. ?

Answer 1

In Good market at egalitium point y = ct 1 th + NX - y = c+I+G+NX Y = 61+0.7y+ HL-6.35+ 3.5+(-0.5-0.150) segat 45:7 +0.74 -0.38 - 0.5-0.150 y = 5.2 toly - 0.458 (y-0.7) = 5.2-0.458 asr - 0.34 - 5.2 0.458 - (5.2 -0.45 0 .3 y = 17.33 -1.50 - Jy = 17.33 - 158 (13 egschen).