Long response questions 1. The country of Researchland has been recently founded. It started as a simple economy with no government. The country will then elect its government and will finally become open to trade. This question guides you through the formation of the country. a. When Researchland is a closed economy with no government we know that: C= 100 + 0.4 Y I = 300 Draw the aggregate demand (AD) scheduled and find: i. the multiplier, ii. the equilibrium level of income, iii. the budget deficit or surplus and the trade balance