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Derive the IS-curve when Ct = acY tqc (Rt r) Y t, where Ct is consumption, ac and qc are coefficients, Rt is the real

Derive the IS-curve when Ct = acY tqc (Rt r) Y t, where Ct is consumption, ac and qc are coefficients, Rt is the real interest rate, r is the marginal product of capital, and Y t is potential output. Assume the remainder of the model is unchanged from the original setup in Chapter 11. Draw the IS-curve for two cases: qc = 0 and qc > 0. Explain why the sensitivity of short-run output, Y t, with respect to changes in the real interest rate, Rt, is different in the two model

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