9.1 Consider an open economy operating with a fixed exchange rate (E) which is initially in equilibrium at point 1 in the diagram below where DD and AA intersect. DD (Y 75-30E) E 1.5 a) Suppose that the equation of the DD curve shown in the diagram above is: Y-75+30E. The equilibrium value of domestic output (Y") can be calculated to be (l mark) b) Now assume that in this economy the real demand for money is a function of the levels of domestic real income (Y and interest rate (R) as follows: M-L(R, Y-0.5Y-1000R. Assume also that the foreign interest rate equals 396: R*-0.03. Then, the economy will be in asset market equilibrium at point 1 in the diagram above if, and only if, the domestic interest rate (R) equals equals and the domestic real money supply (MP) (Show your method of calculation in the space below.) (4 marks)