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Consider an open economy withthe following information: C = 1500 + .6 (YD) I = 2400 -10r T = 1800 + .2 t G =
Consider an open economy withthe following information:
C = 1500 + .6 (YD)
I = 2400 -10r
T = 1800 + .2 t
G = 2000
NX = -200
L = .2 Y - 50 r
M/P = 1000
a- Compute the value of the multiplier.
b- Compute the value of autonomous planned spending (Ap)
c- Find an equation representing the "IS" curve.
d- Find an equation representing the "LM" curve.
e- Find equilibrium interest rate and real GDP.
f. Calculate the crowding effect of additional$500 government expenditures.
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