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Economics, Principles of Mathematical Economics
Year 2

This is a matrices problem and in particular using Cramer's Rule to solve a National Income Model.


Write the following National Income Model in the form Ax = b and solve using Cramer's Rule:

C=α+βY
I=γ+θr
Y=C+I

Where income(Y), consumption(C) and investment(I) are endogenous; the rate of interest(r) is exogenous and α, β, γ and θ are known constants.  Also find the slope of the IS curve.

Attachments
BRAINMASSLIBRARY1.doc  View File

By OTA:  Said Hirsh, PhD (IP)

OTA Rating:  4.5/5

What's included:

  • Plain text response
  • Attachment(s):
    • BRAINMASSLIBRARYSOLN1.doc
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