ECON 401A Hartman Autumn 2010 ANSWERS FOR PROBLEM SET IV 1.a. The ISrelationship is 12804Yr; the LMrelationship is 340024P. 1.b. The ADrelationship is 136064YP1.c. 200Y1.d. 15%r, 10P, 130C, 30I, and 10W1.e. 8P, 10.75%r, 155.5C, 38.5I, and 234Y2.a. Since CIGY , substitute to get 10 0.8() 800YTZGY, which, since 2ZY , implies that 10 0.8() 800 2YGYor that 0.1405 0.40.5YYTG. The model is stable
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