Assume the following equations describe the goods market of an economy
C = 250 + .8(Y-T)
I = 100 - 50r
T = G = 100.
Calculate the IS curve for this economy. If G rises to 120, calculate the new IS curve for this economy. How much and in what direction has the IS curve shifted?
The IS curve is Y = 1850 - 250r before and Y = 1950 - 250r after. The IS curve has shifted up by 100 units.

Question

Assume the following equations describe the goods market of an economy
	C = 250 + .8(Y-T)
	I = 100 - 50r
	T = G = 100.
Calculate the IS curve for this economy. If G rises to 120, calculate the new IS curve for this economy. How much and in what direction has the IS curve shifted?	
The IS curve is Y = 1850 - 250r before and Y = 1950 - 250r after. The IS curve has shifted up by 100 units.

Quizplus · Accepted Answer

The Answer of Assume the following equations describe the goods market of an economy
	C = 250 + .8(Y-T)
	I = 100 - 50r
	T = G = 100.
Calculate the IS curve for this economy. If G rises to 120, calculate the new IS curve for this economy. How much and in what direction has the IS curve shifted?	
The IS curve is Y = 1850 - 250r before and Y = 1950 - 250r after. The IS curve has shifted up by 100 units.

Assume the Following Equations Describe the Goods Market of an Economy