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4. A closed economy is described by the following simple IS-LM system: C = a+b(1 -t )Y -IR (consumption) I = 1 (investment) G =

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4. A closed economy is described by the following simple IS-LM system: C = a+b(1 -t )Y -IR (consumption) I = 1 (investment) G = G (government spending) L = KY - hR (money demand) M = M (money supply) where R and Y are the interest rate and real GDP, respectively, and a > 0, 0 0, andh > 0 are known constants. Find an expression for the linear IS curve and an expression for the linear LM curve. Then find algebraic solutions for R and Y

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