ECON 350 Lecture 2: img003

Solve for equilibrium Y and I given:

C = 300 + .40YD

I = 200 + .15Y - 1000i

G = 220

T = 120

(M/P)^D = 2Y - 4000i

M/P = 1520

A: Write the equation for the IS curve, Y =

B: Write the equation for the LM curve, Y =

C: Find the equilibrium for Y and i

27. What is the deadweight loss from the shoe subsidy? (a) G + H. (b) I + N. (c) L + M. (d) F + K.

27. What is the deadweight loss from the shoe subsidy? (a) L+M. (b) G + H. (C) F + K. (d) I + N.