When LM = 1000 + 200r, C = 800 + 0.5 (Y-T), T=50, G=50, I = 100 - 5r, find interest rate.
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JNU SSS 2021 Question 34: IS-LM model
Answer and worked solution
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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.
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