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Please help me with the following question Suppose that an economy is characterized by the following behavioral equations: c = 0.6er + 630 25r E
Please help me with the following question
Suppose that an economy is characterized by the following behavioral equations: c = 0.6er + 630 25r E = 1333:! I=90030r Ee=2.91 G = 900 Y* = 24,700 T = 690 i* = 3% IM = 0.15Y 2100 + 7008' 'Jte = 3% EX=0.1Y*750E r=F+/17r it = 2% i: r + it\" A = 1 1' = 1% Y* is foreign output. M = EX IM equilibrium equation: 1': C' + I + G + M E is the nominal exchange rate. YD = Y - T 5* is the foreign nominal interest rate. Ination and interest rates are in percent units (e.g., enter 2, not 0.02). Exogenous changes are permanent. Suppose autonomous expenditure falls by 600. 1. Calculate the change in output. (10 points) Suppose the central bank lowers 1" from one percent to zero. 2. Calculate the new value of net exports. (10 points) 3. Show all this on m IS graph. [Label the graph clearly and completely.] (20 points) Given the production function, Y = AK aLUa) assume that o. = 113. The labor supply equation is Ls = 50*w - RStep by Step Solution
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