The IS relation, LM relation, AS relation and AD relations are given by: IS : Y =
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The IS relation, LM relation, AS relation and AD relations are given by: IS : Y = C(Y ? T) + I(Y, i) + G LM : M P = Y L(i) AS : P = P e (1 + m)F ( 1 ? Y L , z) AD : Y = Y ( M P , G, T) Consider an AS-AD equilibrium at some point A. Assume at this initial equilibrium, P = P e
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