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serious [3.7K]
2 years ago
14

Assume an economy where the consumption function is defined as C = CC + cY, and the investment function is defined as I = mr, wh

ere Y is total income, and r is the interest rate. What does the slope of the IS curve depend on?
Business
1 answer:
Hoochie [10]2 years ago
6 0

Answer:

c and m

Explanation:

Given that,

Consumption function: C = CC + cY

Investment function: I = mr

where,

Y = Total income

r = Interest rate

The equation for IS curve is as follows:

Y = C + I

Y = CC + cY + mr

Y - cY = CC + mr

(1 - c)Y = CC + mr

(1 - c)Y - CC = mr

\frac{(1 - c)Y - CC}{m}=r

\frac{(1-c)Y}{m} -\frac{CC}{m}=r

Slope of the IS curve is determined by differentiating 'r' w.r.t 'Y',

\frac{dr}{dY}=\frac{(1-c)}{m}

Hence, the slope of the IS curve depends on the value of c and m.

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Organizational skills allow us to distinguish which are our priorities, short, medium and long term objectives to be met and the steps to follow to fulfill these. Once focused on that, decision-making aimed at meeting these objectives tends to be much faster, which as a result demonstrates more efficient work.

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True or False: The statistical difference between a process operating at a 5 sigma level and a process operating at a 6 sigma le
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Suppose that in Year 1 daily sales at Dave's Deli daily totaled $1,000, and daily sales at Bertha's Burgers totaled $1,500. In Y
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Answer:

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= ($300  ÷ $1,000) × 100

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