(a) Give economic interpretations to the equations and the coefficients a, b, c, d and f.

(b) Substitute the second and third equation into the first and solve for Y.

(d) Calculate the effect of an increase in the interest rate, i, on aggregate demand and production. Explain the result.

(e) What is the slope of the IS curve for this economy?

(c) Calculate the effect of an increase in expected future income, Y\Q3. The slope of the IS curve. Consider the following model of aggregate demand: Y = C + I C = a + bY + CY\" I = d f (i It\") (a) Give economic interpretations to the equations and the coefcients a, b, c, d and