Home / Questions / Algebra andSolve for the equilibrium Find the government spending multiplier
Algebra and IS/LM: IS C=co+c1(Y-T) I=I0-I1(r+f) G=g0+g1Y T=bar T LM M^s/P=M/P M^D/P=l0Y-l1r a. Solve for the equilibrium. b. Find the government spending multiplier (dY/dg0). c. Find the tax multiplier (dY/dT). d. What is the predicted effect of austerity (contractionary fiscal policy) on Y? Use the multipliers to explain.
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