What is the condition for equilibrium?
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What is the equilibrium condition of the aggregate expenditures model?
using the equilibrium condition qs qd determine equilibrium price
Algebraic IS-LM problem , given these:
IS: I= 100-10i, S= -50+.25 YD, YD= Y-T, T=.2Y, G=50, Equilibrium condition IS: I+G=S+T
LM: Lt= .2y, La= 200-5i, M/P=200, Equilibrium condition LM: Lt+La=M/P
1. find equilibrium for IS curve (y=f(i), i=g(y))
2. find equilibrium for LM curve (y=f(i), i=g(y))
3. find equilibrium i, y
4. let the money supply increase by 50 (what happens to equilibrium y,i (multiplier))
5. let y increase by 20