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the following set of equations describe a hypothetical closed economy with government and central bank: C=200+0.25Y D I=150+0.25Y- 1000i G=250 T=200 M D = 2Y-8000

the following set of equations describe a hypothetical closed economy with government and central bank:

C=200+0.25Y D

I=150+0.25Y- 1000i

G=250

T=200

MD= 2Y-8000i

Ms=1600

Where C is the consumption, YD is the real GDP, I is the investment, G is the government expenditure, T is the lump-sum tax, i is the interest rate, MD is the (real) money demand, and MS is the (real) money supply.

a. in the money market equilibrium, money demand, is equal to money supply. that is MD=MS. from this derive Y as a function of i.

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