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GivenL = 0.20Y - 10iM = 200C = 60 0.80YTx = 100I = 150 - 2iG = 100.a) Find the equation for IS and LMb) Find equilibrium output, the rate of interest, and investment.c) Find new equilibrium output, rate of interest and investment when government spending increase from 100 to120d) Explain the changes/effects of economy when there is an increase government expenditure
GivenL = 0.20Y - 10iM = 200C = 60 0.80YTx = 100I = 150 - 2iG = 100.a) …
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