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SECTION B Answer all questions in the section Assume that the following equations summarize the structure of the economy. C = C a + 0
SECTION B
Answer all questions in the section
Assume that the following equations summarize the structure of the economy.
a Derive the equation for the LM curve. marks
b Derive the equation for the IS curve. marks
c Derive the equation for Aggregate Demand AD Curve. marks
d What is the equilibrium Output Y and equilibrium interest rate r marks
e If the money supply decreased to what are the new values of equilibrium output Y
and interest rate r marks
f Illustrate the result of part e on a graph marks
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