Acta Universitatis Danubius. Œconomica, Vol 7, No 5 (2011)

The Equilibrium Analysis of a Closed Economy Model with Government and Money Market Sector

Gina Ioan, Catalin Angelo Ioan


In this paper, we first study the static equilibrium of a a closed economy model in terms of dependence on national income and interest rate from the main factors namely the marginal propensity to consume, tax rate, investment rate and the rate of currency demand. In the second part, we study the dynamic equilibrium solutions in terms of stability. We thus obtain the variation functions of national income and interest rate variation and their limit values.


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