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Make sure to clearly label the X- and Y-axis. You should also clearly indicate the initial equilibrium and the new equilibrium after the changes described

Make sure to clearly label the X- and Y-axis. You should also clearly indicate the initial equilibrium and the new equilibrium after the changes described in the question.

To describe changes you can use the following symbols:

Increase:

Decrease:

No change:0

Effect is ambiguous:?

  1. After discovering a large oil field, the majority of producers in a country is able to sell products at lower prices. In addition, after reading many positive news messages about the state of their economy, households feel very confident about the future and have increased their consumption.
  2. Based on the results of your graph, explain how these changes will affect the interest rate (r), investment (I), output (Y), and savings (S).
  3. In a country where investment does not depend on the interest rate, the Central Bank reduces the discount rate.
  4. Based on the results of your graph, explain how this policy will affect the interest rate (r), investment (I), output (Y), and consumption (C).
  5. In an open economy with floating exchange rates, the Central Bank sells government securities worth $ 1 million.
  6. Based on the results of your graph, explain how this policy will affect the interest rate (r), investment (I), output (Y), Consumption (C) and the value of the domestic currency, and net exports (EX - IM).

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