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Consider an economy in the following situation (all the parameters are positive). (1) IS relation Y = (2) LM relation - ali, ccy -k Cl

Consider an economy in the following situation (all the parameters are positive).

(1) IS relation Y = (2) LM relation - ali, ccy -k Cl X = kY,k > o 1 (3) Aggregate Supply P = P e (1 + , z), F(u, z) = (1 u),

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