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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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