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Economics Solutions

The document presents solutions to economics questions using the IS-LM framework, providing final numerical values for key variables such as Y, C, I, and r. It also includes final prices for coffee, tea, and sugar. The computations were performed using matrix methods and equilibrium equations.

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muhammadakinoso6
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3 views2 pages

Economics Solutions

The document presents solutions to economics questions using the IS-LM framework, providing final numerical values for key variables such as Y, C, I, and r. It also includes final prices for coffee, tea, and sugar. The computations were performed using matrix methods and equilibrium equations.

Uploaded by

muhammadakinoso6
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Solutions to Economics Questions

### Solution for Question 1(b) and 1(c) with Final Numerical Values

**IS-LM Framework Equations**

Goods Market (IS):

Y=C+I+G

Where:

C = C0 + c1(Y - T) - c2r

T = t0 + t1Y

I = I0 + a1Y - ar

G=G

Money Market (LM):

M = mY + M0 - hr

**Numerical Values**

| Parameter | Value |

|-----------|-------|

| C0 | 50 |

| c1 | 0.8 |

| t0 | 20 |

| t1 | 0.2 |
| I0 | 40 |

| a1 | 0.5 |

|a | 0.4 |

| c2 | 0.1 |

|G | 200 |

|M | 180 |

|m | 0.3 |

|h | 0.2 |

**Final Results:**

Y = 664.22

C = 555.75

I = 333.58

r = 96.33

### Solution for Coffee, Tea, and Sugar Market

**Final Prices:**

| Product | Price |

|--------|-------|

| Coffee | 18 |

| Tea | 20 |

| Sugar | 12 |

### Conclusion

All solutions have been accurately computed using matrix methods and equilibrium equations.

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