I need help with the change of equilibrium income when government spending increases.
Ex.page 238 question 3:
Gov. spending increases from $1,500 to $2,000. Find the IS Curve. Does the increase in gov. spending result in an ewual increase in equilibrium income for any given level of the real interest rate? Why or Why not?
Previously Y=12,292.7 - 73.2r
after the increase in Gov spending Y=13,512.2 - 73.2r