###### The market demand function is QS = 18 – 2P The market supply function is QD= 5P – 1.5 both measured in billions of bushels per year. The initial…
September 3, 2020
###### If the following Phillips curve equation represents an economy; 60 – 6u t = 3 t – 3 t-1 what would the natural rate of unemployment be?
September 3, 2020

Assume that the consumption function is given by C = 200 + 0.5(Y – T) and the investment function is I = 1,000 – 200r, where r is measured in percent, G equals 300, and T equals 200.a.What is the numerical formula for the IS curve? (Hint: Substitute for C, I, and G in the equation Y = C + I + G and then write an equation for Y as a function of r or r as a function of Y.) Express the equation two ways.b.What is the slope of the IS curve? (Hint: The slope of the IS curve is the coefficient of Y when the IS curve is written expressing r as a function of Y.)c.If r is one percent, what is I? what is Y? If r is 3 percent, what is I? what is Y? If r is 5 percent, what is I? what is Y?d.If G increases, does the IS curve shift upward and to the right or downward and to the left?