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Consider the open economy IS/LM model with the following functions: C = 0.25*(Y T), I = 50080r, NX = 200050e, L(Y, r) = Y 400r
Consider the open economy IS/LM model with the following functions:
C = 0.25*(Y T),
I = 50080r, NX = 200050e,
L(Y, r) = Y 400r (real money demand),
CF = 800500r.
Taxes, government purchases, the nominal money supply, and price level are:
T =800, G=3000, M =4000, and P =2.
What are the equilibrium values for GDP Y, the interest rate r, consumption C, investment I, net capital outflow CF, net exports NX, and the exchange rate e?
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