Problem 1 A closed economy is characterized by the next equations:

= 143 + 0,8 Yd; consumption function, where Yd- disposable income;

= 161 taxes, I = 198 - 40 i investment function, where i - interest rate;

G = 285 government expenditures;

L d = 0,5 - 6 money demand function;

= 847 money supply;

=1 price level.

1) derive the equations of LM and IS curves;

2) calculate the equilibrium interest rate and level of income;

3) derive the aggregate demand equation and plot its schedule, provided that the prices have risen to the level P=2.