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How can i draw rough graphs and mark the equilibriums using information in a. and d. using aggregate expenditure curve and the 45-degree line?
Suppose an economy is open and has prior information as follows.
Y = C + I + G + (X-M)
Given that C = C0 + C1Yd and Yd = Y-T, C0 = 20; C1 = 0.8; I = I0 = 80; G = G0 = 80; T = T0 = 50; X = X0 = 20; M = M0 + M1Y; M0 = 20; M1 = 0.25