suppose Y=100 is fixed,suppose the consumption function is c(Y-T)=20+M(Y-T), where M is constant between 0&1,suppose the investment function is I(r)=30-50r,suppose we leave G&T as un specified constant.drive equilibrium interest rate&predict effect of increase i G on r

1 answer

I'll do you a favor and answer your question.

The sufficient reoccurring M factor is 4, and Y:T radius is 3-5=-2. With that we get our 'supposed' main rate and predicament. G=i+r, and if R=M as shown in equation #1, and the Y:T ratio is also I = 6, then that means the ending 'i G on r' is 10.

The ending factor is 10.