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Thank you for the help Suppose that an economy is characterized by the following behavioral equations: 1005 C = 0.65Y + 630 - 25r E=

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Suppose that an economy is characterized by the following behavioral equations: 1005 C = 0.65Y + 630 - 25r E= 100+1-1 1 - 900 - 30r E -2.91 G - 900 Y = 24.700 T - 690 * = 3% IM = 0.15Y - 2100 + 700E 1- 3% EX -0.1 Y* - 750E IT = 2% i-r+n' 2 - 1 F = 1% Y'* is foreign output. NX - EX - IM equilibrium equation: Y= C+/ +G+ NX E is the nominal exchange rate. YD = Y- T is the foreign nominal interest rate. Inflation 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. Suppose the central bank lowers f from one percent to zero. 2. Calculate the new value of net exports. 3. Show all this on one IS graph. [Label the graph clearly and completely. ]

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