Assume the following model of the economy, with the price level fixed at 1.0:

C = 0.8(Y - T)
T = 1,000

I = 800 - 20r
G = 1,000

Y = C + I + G
M^s/ P = M^d/ P = 0.4Y - 40r

M^s= 1,200

a.Write a formula for the IS curve, showing Y as a function of r alone.

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The Answer of Assume the following model of the economy, with the price level fixed at 1.0: C = 0.8(Y - T) T = 1,000 I = 800 - 20r G = 1,000 Y = C + I + G M^s/ P = M^d/ P = 0.4Y - 40r M^s= 1,200 a.Write a formula for the IS curve, showing Y as a function of r alone.

Assume the Following Model of the Economy, with the Price