Hey my friend got this question that none of us can figure out, if u could provide some help it'd be great.
Thx.
(MacroEcon) This question involves algebraically solving the system of two equations give by the AD and SRAS curves.
ad: Yad = 710 ?30P + 5G
sras: Ysras = 10+ 5P ?2Poil
where Y is the real GDP, P is the price level, G is the level of government purchases, and Poil is the world price of oil
sras= short run aggregate supply
ad= aggregate demand
1) Solve for the equilibrium value of real GDP and the price level.
2) using the solution to part 1, what is the effect of a change in G on equilibrium Y and P?
3) using the solution to part 1, what is the effect of a change in Poil on equilibrium Y and P?
Thx.
(MacroEcon) This question involves algebraically solving the system of two equations give by the AD and SRAS curves.
ad: Yad = 710 ?30P + 5G
sras: Ysras = 10+ 5P ?2Poil
where Y is the real GDP, P is the price level, G is the level of government purchases, and Poil is the world price of oil
sras= short run aggregate supply
ad= aggregate demand
1) Solve for the equilibrium value of real GDP and the price level.
2) using the solution to part 1, what is the effect of a change in G on equilibrium Y and P?
3) using the solution to part 1, what is the effect of a change in Poil on equilibrium Y and P?
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