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2. Assume that the consumption function is given by C=200+0.?5 (Y-TJ The investment function is l=20025r. Government purchases and taxes are both 100. a. For

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2. Assume that the consumption function is given by C=200+0.?5 (Y-TJ The investment function is l=20025r. Government purchases and taxes are both 100. a. For this economy, graph the IS curve for r ranging from 0 to 8. b. The money demand function is [MIPP-loor. The money supply M is 1000 and the price level P is 2. For this economy, graph the LM curve for r ranging from 0 to B. c. Find the equilibrium interest rate r and the equilibrium level of income. :1. Suppose that government purchases are raised from 100 to 150. How much does the IS curve shift? What are the new equilibrium interest rate and level of income? e. Suppose instead that the money suppiy is raised from 1000 to 1200. How much does the LM curve shift? What are the new equilibrium interest rate and level of income

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