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Desired consumption, desired investment, and government spending in a closed economy are Cd = 160 - 100r + 0.2Y Id = 120 - 400r G

Desired consumption, desired investment, and government spending in a closed economy are

Cd = 160 - 100r + 0.2Y

Id = 120 - 400r

G = 100

In the same economy, the real money demand function is

Md/P = 200 + 0.1Y - 1000r

whereP = 2 andM= 2100.

Find the equilibrium level of r and Y?

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