Mathematics, 14.06.2021 08:40 ggomez4
Problem 3 (2 points): Consider the macroeconomic model defined by
National income: Y = C + I + G* (G* > 0)
Consumption: C = aY + b (0 < a < 1, b > 0)
Investment: I = cr + d (c < 0, d > 0)
Money supply: MS* = k1Y + k2r (k1> 0, k2< 0, MS* > 0)
Show that this system can be written as Ax = b, where
a/ Use Cramer’s rule to find C;
b/ Then write down the money supply multiplier for C and deduce its meaning
Answers: 3
Mathematics, 21.06.2019 14:30
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Problem 3 (2 points): Consider the macroeconomic model defined by
National income: Y = C + I + G* (...
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