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Stacked An economy is initially described by the following equations: C = 60+ 0.8(Y-T) I = 120-5 M/P = Y-25r G = 200 T = 200
IS: Y= LM: Y= IS-LM Graph 10 IS 9 LM 8 7 5 4 3 2 1 . 800 850 900 950 1.000 1050 1.100 1.150 1.200 Y
An economy is initially described by the following equations: C = 60+ 0.8(Y-T) I = 120-5r M/P = Y-25 G = 200 T = 200 M = 3000
c. Now assume that the central bank adjusts the money supply to hold the interest rate constant. What is the new level of inc
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ca) ca 6ot 0.8LY-T) I120 - 50 y 257 P 200 T = 200 M = 3000 Cop=3 we know i alyz C+I+G So Y=boto. 8 (Y-T) + 120-58 +200 y= 60+from is and im equation lloc 258 2 Loud +258 5orz 822) and y = 1100-25(2) yz 1100-50 1050 I lyz M 7 6 3 IS 2 A 1 800 850 90olb) now new tax would sa be 200 100 z 200 - 50 2150 200 x 25 Y2 boto 8 Ly-150) + 120-58+ 200 0.24 = 60 - Do + 320-50 0:24 260

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