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An economy is described by the following equations. Equilibrium in the goods market satisfies Y = C+I+G, where C = 20 + 0.6(Y - T),

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An economy is described by the following equations. Equilibrium in the goods market satisfies Y = C+I+G, where C = 20 + 0.6(Y - T), T =0, G = 10, M = 150, and I =60 -6r (r is denoted in percentage terms.) Equilibrium in the money market is given by M Y P 3 + 400 - 60r. The aggregate supply curve for the economy is given by Y - Y P = P + 200 where Pe is the expected overall price level, and Y is the natural (long-run) level of output. Assume that P = Pe = 1.

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