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1. Let the money demand function be MD = 50 - 25r + 5Y P the consumption function be C = 10 + 0.5(Y -

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1. Let the money demand function be MD = 50 - 25r + 5Y P the consumption function be C = 10 + 0.5(Y - T) and the investment function be I = 17-r where r is the real interest rate in %. Let 7 denote taxes, G denote government expenditures, P denote the price level and M denote the money supply- (a) What is the equation that describes equilibrium in the loanable funds market? What is the equation that describes equilibrium in the money market

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