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Questions › IIT JAM › IIT JAM 2024 › Q58
2 marksMacroeconomics › IS-LM model › Equilibrium and shifts in IS-LMHardabout 3 min

IIT JAM 2024 Question 58: IS-LM model

In a closed-economy IS-LM model: Y=90+0.8Yd−100i+GY = 90 + 0.8 Y_d - 100i + GY=90+0.8Yd​−100i+G and Ms=750+0.2Y−260iM_s = 750 + 0.2Y - 260iMs​=750+0.2Y−260i, with T=5+0.2YT = 5 + 0.2YT=5+0.2Y, G=300G = 300G=300, Ms=950M_s = 950Ms​=950. The value of TTT at equilibrium YYY is ________ (rounded off to the nearest integer).

Answer and worked solution

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Plain-text version

In a closed-economy IS-LM model: Y = 90 + 0.8 Y_d - 100i + G and Mₛ = 750 + 0.2Y - 260i, with T = 5 + 0.2Y, G = 300, Mₛ = 950. The value of T at equilibrium Y is (rounded off to the nearest integer).

Also written as: In a closed-economy IS-LM model: Y = 90 + 0.8 Y_d - 100i + G and M_s = 750 + 0.2Y - 260i, with T = 5 + 0.2Y, G = 300, M_s = 950. The value of T at equilibrium Y is (rounded off to the nearest integer).

IS-LM model has come up 137 times in 7 exams since 2004.

What this question tests

This question is on Equilibrium and shifts in IS-LM, part of IS-LM model in Macroeconomics.

Solving for income and the interest rate and tracing what shifts each curve.

TestStop has 18 past-paper questions on this subtopic; the nearest in year are below.

  • IIT JAM 2022 · Q57Product market: C = 300 + 0.8(Y - T), T = 200 + 0.2Y, I₀ = 300, G₀ = 400. Money market: M₀/P = 0.4Y - 200i…
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Question from the IIT JAM 2024 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.