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Consider an economy represented by the following equations:C=100+0.9Yd; I=200-500i;X-F=100-0.12Y-500i;G=200;t=0.2;M=800;P=1;Lt=0.8Y;Ls=100-200i (i<0.5)a) Calculate the equilibrium level of income and interest rate.b) Find the expression of the aggregate demand. Represent it graphically.c) What will be the effects on aggregate demand from an increase of 100 m.u. in public expenses?
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