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b) Find the government spending multiplier ( ) holding the real interest rate constant. How does an increase in the parameter , affect the multiplier?
b) Find the government spending multiplier ( ) holding the real interest rate constant. How does an increase in the parameter , affect the multiplier? Explain briefly the mechanism.(a) Derive the IS curve as a relation between short run output f'; and the real interest rate gap R1 \"F. Problem 3: Consider the following equations Yt = Ct + It + G+ + EXt - IMt Ot = atxYt; 00; 0
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