Can a tutor help me figure out how to answer these questions please? I know the IS-LM function is represented by Y= C(y-T) + I(r) +G for the IS curve and M/P = L is the formula for the LM curve. Actually, the information that are given to me doesnt have the same value as the formulas. If i can have some information as to what each value is equal to the fundamental formula that can help me do the homework.
Please help me to determine what is the value of the given information to the above formula.
Assume that we have the following data:
C=100+0.50Y
Ip=100-20r
Mt=0.10Y
Ms=100-10r
M=80
a. Build the IS-LM function.
b. If we assume an increase in Investments by 100 units, calculate again the IS-LM functions.
c. The intersection of IS-LM functions defines four areas. Analyze the behavior of the markets for goods and money for each area.