An increase in aggregate income investment that increases income at every level of interest rate. The increase in income is small because the increase in investment spending which increases the transactions demand for money. When this happens the interest rate actually rises.
Increase in money supply that raises the level of income and lowers interest rates
Simultaneous shift of the IS and LM curves. When there is a simultaneous shift in the IS and LM curves, the income will rise but whether the interest rate will rise or fall depends on the change in money supply
Dana05 answered the question on August 14, 2019 at 07:31
- The following equation describe a certain economy
C = 400+ 0.75T
I = 200 - 100r
T = 70 + 0.2Y
G = 100
Money supply = 4000
Money demand...(Solved)
The following equation describe a certain economy
C = 400+ 0.75T
I = 200 - 100r
T = 70 + 0.2Y
G = 100
Money supply = 4000
Money demand = 0.2Y – 10r
Find the values of Y, C, T, M and I
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