Consider the following model c2005y-t i20-10r t0 g50, Business Economics

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Consider the following model c2005y-t i20-10r t0 g50

Consider the following model: C=20+0.5(Y-T) I=20-10r T=0 G=50 QUESTIONS: a) Obtain the equation of the IS curve. What is the slope of the curve? Calculate output if r=0.1 b) Suppose now that autonomous consumption increases to 30. What happens to the IS curve? Show your results in a graph. c) Suppose now that there is a change in marginal propensity to consumption so that now c1=0.6. What happens to the IS curve? Show your results in a graph.

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Business Economics: Consider the following model c2005y-t i20-10r t0 g50

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