QUESTION

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4) (10 pts) Consider an economy that has the parameters below and no supply constra ints (no infiation either): \[ \begin{array}{l} M P C=0.9 \quad T=200 \quad G=200 \quad X=300 \quad M=600 \quad M s=2000 \\ M d=0.5 Y-100 r \quad C a=1000-8 . \quad I p=680-12 r \end{array} \] a. Derive and clearly show the Is curve b. Derive and clearly show the LM curve; c. Find the equilibrium income and interest rate

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