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2. IS-LM Framework Consider the following economy: C = 700 + 0.8(Y - 0.2Y) -200 NX = 300 - 0.04Y - 15R I = 500
2. IS-LM Framework Consider the following economy: C = 700 + 0.8(Y - 0.2Y) -200 NX = 300 - 0.04Y - 15R I = 500 - 25R G = 500 M /P = 0.4Y - 40R MS/P = 1200 Use the information provided above to: i. Derive the IS Curve and state its slope. ii. Derive the LM Curve and state its slope. iii. Calculate the equilibrium interest rate and output level. relationships on a graph
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