An economy is characterized by the following macroeconomic relationships: C = 2500 + .95Y I= 1500 5000i Md = 200,000 + .50Y 200,0001' M; = 210,000 0 What are the equations for the IS and LM curves for this economy? 0 Find the equilibrium values for aggregate output and the interest rate. 0 Check the solution. That is, conrm that at the equilibrium values of Y & I, the value of the economy's output is matched by Aggregate Demand, the demand for money matches the supply of money. 0 What is the multiplier for this economy? 0 Sketch the solution in the diagram using PowerPoint and show how an increase in the money supply will affect the LM curve and the equilibrium