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Economics
Macroeconomics
Expenditure model
in a expediture model was does the price level and interest rates, consumption have a inverse relationship?
1 answer
I think I understand your question. The answer is yes. Price and consumption are inversely related as too are interest rates and consumption.
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Consumption=2000+0.9y-100000r-g
Investiment=1000-4500r Real money demand=y-6000i Inflation=0.03 G=500 Full employment=1000 M=2100
