When consumption function is C= 15 + 0.5 and investment function is I = 150 - 10r, G = 20 =T, find equation for IS curve.
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JNU SSS 2021 Question 8: IS-LM model
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When consumption function is C= 15 + 0.5 Y_d and investment function is I = 150 - 10r, G = 20 =T, find equation for IS curve. (A) Y= 350 -20r (B) Y= 440 -40r (C) Y= 350 -40r (D) Y= 470 -40r
IS-LM model has come up 137 times in 7 exams since 2004.
What this question tests
This question is on Deriving the IS curve, part of IS-LM model in Macroeconomics.
How the goods market gives a downward-sloping relation between the interest rate and income.
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