Show what happens to the equilibrium conditions in Problem 4.23 if autonomous investment drops to 97.

If I0 = 97, the IS equation becomes:

A fall in autonomous investment, ceteris paribus, leads to a decrease in the equilibrium level of income and a drop in the interest rate.

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Y = 89+0.6Y +97 - 150i 0.4Y+150i - 186 = 0 (4.63)