real money demand equation
IS-LM model with respect to the / AS AD?
So I just made the most of a practical issue, but can not see (for sure) in the last two bits of a problem. An economy is described by the following equation: C = 0.8 (1-t) and t = 0.25 I = 900 – 500i G = 800 L = 0.25Y – 62.5i M = 500 P = 1 after equations determine IS and the LM curve (y = 4250-1250i) (SM Y = 2000 + 250i) and the average balance and interest rates (i = 1,5 Y = 2375) Suppose I am stuck on …. the economy is not in equilibrium. If Y = 3000 and i = 3, which is greater, dumping or? Suppose that the economy is not in equilibrium. If Y = 3000 and i = 3, the demand is higher for the money or the provision of money real? I guess AS / RMS – but these are only conjectures. Can I get a run through of how to get the right answers? Thank you!
[ES] Y = C + I + G = 0.8 (1-t) and t = 0.25 I = 900-500i G = 800 Y = 0.8 (1-0,25) + S 900 – 500i + 800 Y = 1700 + 0.6Y – 500i 0.4Y = 1700-500i Y = 4,250-1'250i [SM] M / P = L 500 / 1 = 0.25 Y-62.5i 500 62.5 i = 0.25YY = 250i + 2,000 i = 0.004Y-8 [IS-LM] Y = 4,250 – 1'250i i = 0.004Y Y-8 = 4,250 – 1250 (0.004Y-8) 14 = '250 – 5Y 6Y = Y = 14'250 14'250 / 2'375 = 6 i = 0.004Y-8 = 0.004 * 2'375 – 8 = 1.5 [AD] Y = 4,250-1'250i 500 / P = 0.25Y-62.5i 62.5i = 0, 25-500 / P i = 0.004Y-8 / YP = 1'250i = 4'250-4'250-1 '250 (0.004Y-8 / P) = 4,250 – 5Y +10'000 / P 6y = 4 '250 +10'000 / YP = 708.33 + 1666.67 / Economy P is still in the balance short term, but not always in balance in the long term. Today, the economy was too high 3'000> 2'375, Y> Y *, So there is no positive output gap (the economy booming) and ad is superior long term * but at the same time, DC is in equilibrium in the short term with the SARS situation now is that SARS and AD = AD (Y)> AS * (Y), AD (P)
