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1. b) Now relax the assumption on autonomous investment. Introduce the investment function 1 =10 t9r, where r is the real interest rate. Derive the

1. b) Now relax the assumption on autonomous investment. Introduce the investment function 1 =10 t9r, where r is the real interest rate. Derive the IS curve. If the LM curve in this economy is %= aY ,6r then derive the equilibrium output. Derive the multiplier effect and explain. Would there be a crowding out

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